After several years of impacts from the economic downturn, Santa Barbara is slowly making a comeback. 

Mayor Helene Schneider gave her annual "State of the City" report this morning at a Chamber of Commerce breakfast meeting attended by about 400 people.

The event was also streamed live on

"We're coming out of the recession with renewed inspiration,' said Schneider.

The city says, however, it still needs millions of dollars to pay for on going street improvements, upgrades to parks and big ticket items like a new police headquarters.

Tourism also remains strong.  It's driven up the hotel bed tax to a record level in 2012.

City Administrator Jim Armstrong said property taxes are still flat but "just being flat in this economy is good."