Page 16 - FY 2022-23 Revenue Outlook

funds, and 2021-22 receipts include an $85.1 million transfer from the Reserve
Fund.

In 202-22, continued growth in home sales and prices resulted in a $75.8 million
increase to estimated documentary transfer tax receipts. While sales tax, parking
occupancy and transient occupancy receipts have also exceeded the adopted
budget ($101.3 million net increase), the impact to the travel, entertainment, and
the leisure and hospitality sectors was profound. Tourism in the County dropped
48.5 percent from 2018-19 levels due to the travel restrictions and economic
downturn, and the arrival of new COVID-19 variants resulted in cancelation and
delays of large events. With the end of 2022, the County has recovered only half
of the lost leisure and hospitality jobs. Consequently, transient (TOT) and parking
occupancy (POT) estimates remain below 2018–19 receipts for this year as well
as 2022-23.

The pandemic’s lagging impact on annually collected receipts can also be
quantified in the revised budget. The adopted budget assumed modest growth of
5.9 percent for property tax assessed value based on historical change in receipts,
low inflation and the strength of the real estate market. However, actual growth of
4.0 percent reflects the County Assessor’s $30.2 billion reduction to the assessed
value of business personal property (net -$26.7 million decrease to all property
revenues). In contrast, growth in annual business tax renewal revenue exceeded
expectations (net $19.1 million increase).

The revised revenue budget includes a $26.0 million net decrease to departmental
receipts which include: special fund reimbursements from changes in cost
allocation plan (CAP) rates, vacancies, salary assumptions, and revenue
($15 million); gas tax overhead reimbursements due to decreased gas tax receipts
($9 million); proprietary departments and sidewalk repair program reimbursements
($12 million); and receipts from vehicle application and drive permits, parking
meters and operations, and off-street parking ($7 million). The reductions are
primarily offset by increases to: ambulance billing fee adjustments and transport
activity ($13 million); and one-time revenue from Superbowl LVI reimbursements,
surplus property sales, salvage receipts, escheatments, and the returned balance
of Ardon settlement monies (net $11 million).

Other changes from adopted budget revenue include: increased utility user tax and
franchise revenue from higher natural gas prices (net $17.9 million); increased
interest earnings receipts from higher rates and a larger General Fund treasury
pool ($7.0 million); reduced parking citation revenue, partly attributed the impact
of COVID-19 on staffing levels (-$11.5 million); and lower grant revenue from
delayed Federal Emergency Management Agency (FEMA) application processing
and receipts budgeted in advance of anticipated reimbursement (-$32.1 million).

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