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Cities, counties and the state of California are facing cataclysmic levels of revenue reduction. We arrived at this unfortunate situation due to a lack of fiscal discipline at all levels.

From 2001 through 2006, sales tax and property tax revenues soared at a pace matched only by the incredible run-up in home prices. Local governments matched the increase in annual revenue with increased annual expenses. What most of our leaders failed to recognize was that the new revenue would only last as long as new home construction continued.

With each new home sale, a family purchased new window coverings, paint, furniture, landscaping materials, storage additions, light fixtures and many other taxable goods. And with each new home sale, wages were paid to the construction workers, realtor, escrow agent and others who spend those dollars locally. When home construction dried up, so did the sales tax revenue.

The rapid increase in home prices brought with it a rapid increase in property tax revenues. This increase was not limited to just new homes, but the entire housing stock. Homes built in the '90s, '70s and pre-1950s also saw their values skyrocket, and with each transaction those values were locked in at a higher tax rate. Now that housing prices are depressed, with each sale the annual property tax revenues get smaller. Cities and counties will not see their property tax revenues increase until sale prices are back to their 2006 peak or until new construction takes off again.

The effect is a perfect storm of revenue reduction to local government with no sign of relief. In 2009, statewide, local governments are projected to receive just one-third the sales and property taxes they received in 2005.

From 2001 through 2006, when money was flowing, government expanded the services it provides and the cost, through salaries and benefits, of that service to levels that cannot be sustained. Collectively, we must accept a lower level of service, fewer street sweepers, less park maintenance, slower response times, less government-provided amenities and fewer government programs, and those providing government services must accept (as the private sector has already done) fewer benefits and lower compensation for their work.

Looking to the future, the Building Industry Association of the Delta (BIAD), as a community partner with local jurisdictions, would like to re-examine our long-term expectations from government and ways to finance those expectations. In the short term, the quickest way to get our local economy moving again is to spur new construction.

BIAD asks each local government to adopt the "San Joaquin Stimulus Plan." Defer the collection of all building and permit fees from issuance of building permit to close of escrow, suspend all non-essential fees for 12 months, and temporarily reduce all fees by 25 percent.

Last week, a local city manager declared that he would reduce fees today if he knew a developer would be willing to build something. Today we ask each city manager in the county to make this commitment toward economic growth a reality. The revenues you generate from the new sales tax and the increase in property tax will more than make up for any temporary reduction in fees. And the people who go back to work because of your actions will thank you.

John Beckman is a former mayor of Lodi and chief executive officer of the Building Industry Association of the Delta.