Page 16 - FY 2021--22 Revenue Outlook

Fiscal Year 2021-22 Growth Summary for Economy Sensitive Taxes

Above Average Average Growth Below Average Decline
 Business  Property  UUT-Electric  UUT - Communication
 Sales  UUT-Gas
 Transient  Documentary
Occupancy Transfer
 Parking
Occupancy

Estimated growth compared to 10-year averaged growth.

Growth in the City’s seven major taxes from the revised 2021-22 estimate is
8.8 percent, compared to an estimated decline of -2.3 percent for the previous
year. This growth includes the presumed recovery in transient and parking
occupancy taxes, which together have dropped an estimated 65 percent from
pre-pandemic receipts due to the combined impact of travel restrictions, business
closures and recession. Despite the 75 percent growth assumed for both in
2021-22, these receipts are expected to remain well below 2018-19 revenues.
Sales tax and business tax (excluding cannabis activities) which includes
receipts from sectors able to adapt to the pandemic, dropped an estimated 8.1
percent from 2018-19 revenue. High growth expected for sales tax presumes that
2021-22 revenue surpasses 2018-19 receipts and represents a move towards
the pre-pandemic growth trend. More modest, but still higher-than-average
growth is assumed for non-cannabis related business taxes as receipts reflect
the economic conditions of the prior calendar year—i.e., the 2022 renewal period
will reflect the muted business earnings from current 2021 restrictions. Business
tax from cannabis activities continued to grow unabated throughout the
pandemic, and 2021-22 assumes continuing growth in current tax period receipts
and slowing growth in prior-tax period collections.

Property, utility users and documentary transfer tax estimates reflect
assumptions that their respective tax base (assessed value; gas, power and
telecom pricing and demand; and home prices and sales) were minimally
impacted by the pandemic, with previous growth (or decline) trends assumed to
continue. However, both property and electricity users taxes reflect adjustments
made for increased taxpayer and ratepayer delinquencies seen during 2020-21.

Growth in departmental receipts reflect the easing of pandemic-related
restrictions on Transportation, Police, Fire, Building and Safety, Animal Services
and other department services, restoring license, permit, fees and fine receipts.
Additionally, updates to the cost allocation plan will increase reimbursements for
related costs and other expenditures from proprietary and special funded
departments. However, decreased balances in the solid waste, gas tax,
stormwater, and other special funds will reduce reimbursements below cost
recovery.

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