Page 16 - FY 2020-21 Revenue Outlook

related losses identified in current year revenue include: reduced city services
across multiple departments (-$16.3 million), reduced parking citation revenue
due relaxed enforcement and extended due dates (-$15.6 million), and a reduced
Special Parking Revenue Fund transfer from lower parking meter and parking lot
receipts (-$18.3 million).

In addition to revenue losses caused by the pandemic, the City was already
anticipating revenue shortfalls in former CRA/LA receipts, utility users taxes, the
Power Revenue Fund transfer and other revenue categories. Combined with the
pandemic losses, the total revenue impact from these revenue categories is
-$165.6 million.

Offsetting these revenue loses are property and documentary transfer taxes,
departmental receipts, franchise income and interest earnings receipts that
outperformed adopted budget expectations, collectively by $57.1 million. Details
are presented in the General Fund Outlook Table and Assumptions in this
Section, with greater detail given in Sections 2 and 3.

2020-21 Proposed General Fund Revenue

Total General Fund receipts for 2020-21 are estimated to grow 1.8 percent above
the 2019-20 adopted budget and 3.2 percent above the revised estimate, to
$6.69 billion. Assumed one-time receipts total $60.2 million, of which
$56.0 million represents the receipt of 2019-20 tax and departmental revenues
that were delayed during the pandemic.

More than 70 percent of this General Fund revenue estimate consists of seven
major taxes: property, utility, business, sales, document transfer, and transient
occupancy and parking occupancy, all of which are vulnerable to declines during
an economic downturn. Since 1990 actual receipts from these sources have
averaged 3.7 percent growth. Yet, during the second year of the Great
Recession—a global event triggered by the growth and collapse of the housing
and debt bubbles during a period of reduced financial regulation and high-risk
investments, these combined receipts declined 4.8 percent. A similar decline
today would equate to a General Fund revenue loss of $225 million. The
implosion of the housing market during this time resulted in four years of
declining property tax receipts (the General Fund’s largest revenue source), as
well as a 60 percent reduction in documentary transfer taxes (the General Fund’s
most volatile) which has yet to reach the pre-recession peak.

Consequential efforts to build government reserves and to stabilize the financial
system has placed the economy in a better position to weather the economic and
public health shock of the pandemic. Currently, the greatest assumed risks to
economy-sensitive revenue are to the transient occupancy, parking occupancy,
business and sales taxes which are the receipts most impacted by reduced
tourism and the lingering effects to employment and business operations from

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