Page 24 - FY 2021--22 Revenue Outlook

General Fund Revenue Outlook
Fiscal Years 2020-21 through 2025-26
General Assumptions

Transient Occupancy Current year transient occupancy tax (TOT) revenue from hotels and short-term
Tax rentals has been revised downward to reflect actual receipts as impacted by
pandemic-related travel restrictions. 2020-21 and 2021-22 estimates are based on
tourism industry forecasts for Los Angeles County that assume a gradual recovery
to pre-pandemic hotel room demand by 2023-24.The forecast for 2025-26 is based
on historical growth.
Power Revenue The Power Revenue transfer amount for 2020-21 has been reduced to reflect
Transfer adjustments made for actual 2019-20 power system revenue. The transfer for
2021-22 is based on the estimate provided by the Department of Water and Power
(DWP), which is derived from assumptions for estimated 2020-21 Power System
revenue. The final transfer amount may be adjusted to conform to actual 2020-21
power system revenue in accordance with audited financial statements. Outgoing
years assume an average of amounts transferred since a transfer limit was
established.
Documentary Documentary transfer tax revenue is volatile and can have large swings when
Transfer Taxes home sales volume and prices move together. Revenue for 2020-21 has been
increased to reflect the quick recovery in home sales after the first wave of
pandemic-related closures. While sales remain below the prior year, the decline
has been offset by price appreciation attributed to low interest rates and low
inventory. 2021-22 and outgoing years assumes both sales volume and prices
remain stable under increasing interest rates, as transfer tax revenue is predicted
to reach the revenue peak that was set at the height of the real estate bubble.
Parking Fines The parking fine estimates for 2020-21 and 2021-22 are developed by the
Department of Transportation based staff and resources available for parking
enforcement activities. Outgoing years assume stable receipts based on 2018-19
revenue that predated the pandemic.
Parking Occupancy Current year parking occupancy tax has been revised downward to reflect actual
Tax receipts, as impacted by the pandemic-related business and event closures. The
potential liability for the refunding of pre-paid parking occupancy taxes is not
reflected in the estimates for 2020-21 or 2021-22. 2021-22 through 2023-24
receipts are assumed to recover at a faster pace than TOT. 2024-25 and 2025-26
assume historical growth.
Franchise Income Revised franchise revenue in 2020-21 has been increased to reflect higher receipts
in natural gas, offset by the lower official police garage (OPG) receipts realized
during the pandemic-related closures.
2022-22 revenue assumes the additional deposit of cable franchise fees in the
General Fund, as well as the recovery of OPG franchise revenue. All other receipts
are assumed to remain flat. All franchise receipts are assumed to remain constant
for outgoing years.
Special Parking Due to the pandemic’s impact on parking revenues, the 2020-21 transfer has been
Revenue eliminated. The 2021-22 estimate assumes a smaller surplus available for transfer.
Subsequent years assume the base transfer amount of $23.5 million.
Interest Earnings The interest earnings estimates for 2020-21 and 2021-22 were provided by the
Office of Finance in April, reflecting low economic activity and suppressed fixed-
income returns as well as the anticipated receipt of American Rescue Plan funds.
Subsequent years assume earnings return to pre-pandemic levels.

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