Page 24 - FY 2020-21 Revenue Outlook

General Fund Revenue Outlook
Fiscal Years 2019-20 through 2024-25

General Assumptions
Economic Growth This forecast is based on long-term historical experience, with total City revenue
growth for outgoing years estimated between 3.0 and 4.1 percent. Unless
otherwise noted, individual revenue sources reflect continuing growth in fiscal years
2021-22 through 2024-25 based on historical average receipts.
Property Tax Fiscal year 2019-20 revised receipts reflect the County Assessor’s reported growth
in assessed value for the City, offset by refunds and other adjustments. The County
Assessor has not provided a preliminary estimate for property tax growth for
2020-21. 2021-21 growth of 6.6 percent—based on current year growth—is
assumed for County tax year assessed value, while refund and redemption
activities remain flat. The possible impact of pandemic-related recession is
reflected in the receipt of 2019-20 delayed receipts and lower growth in unsecured
and supplemental receipts. Outgoing years assume historical growth.
Redirection of ex- This revenue category was first received in June 2012. Growth is erratic. Pending
CRA Tax Increment tax increment receipts for 2019-20 and 2020-21 are partly based on the proposed
Monies payment schedule (ROPS) Additional one-time miscellaneous revenue from
various surplus property sales are assumed for 2019-20, 2021-22 and 2022-23.
Subsequent fiscal years assume conservative growth based on the trend of lower
tax increment growth (receipts) and increasing pass-through distributions
(expenses) and align with property tax growth assumptions.
Utility Users Tax Electricity users tax (EUT) revenue for 2020-21 and 2021-22 are based on June
• Electricity Users Tax 2018 billing estimates provided by the Department of Water and Power (DWP),
adjusted to reflect uncollectable receipts. As DWP was unable to provide revised
• Gas Users Tax estimates reflecting the impact of the pandemic and recession, revenue estimates
• Communication used the low range estimates for 2019-20 and 2020-21.
Users Tax Natural gas users tax revenue for 2019-20 has been revised upward to reflect a
second year of higher February and March remittances; although remaining
2019-20 and 2020-22 receipts are lower with the implementation of a legal
settlement that will reduce the tax rate for three years and lower forecasted natural
gas prices.
The decline in communication users tax (CUT) revenue continues as result of
strategic wireless plan pricing and decreased landline use. Outgoing years assume
that CUT receipts continue the steady decline that began in 2008-09.
Higher growth in EUT is assumed for total user tax revenue in 2021-22, returning to
lower growth in outgoing years, consistent with the historical average.
Departmental Departmental receipts for 2019-20 are projected to meet planned receipts, with
receipts areas of increased growth offset by the estimated $16.3 million impact of the Civic
Center closure and Safer at Home Order Growth. Approximately $3.8 million of this
loss represent delayed receipts assumed in the 2020-21 budget. The estimate for
2020-21 also reflects additional services provided by the LAPD to the Los Angeles
County Metropolitan Transportation Authority for security services; ambulance fee
adjustments; services to proprietary departments based on estimated billings for
cost of services; full funding of retirement fringe benefits based on budgeted
salaries; and as-needed and part-time related cost recovery.
Increased related costs reimbursements for 2019-20 are based on updated CAP
rates and vacancy, salary and service level assumptions. Assumed growth in
subsequent fiscal years is 2.7 percent.

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