Page 44 - FY 2022-23 Supporting Information

2022-23 PROPOSED BUDGET
FOUR-YEAR GENERAL FUND BUDGET OUTLOOK (OUTLOOK) FOOTNOTES

REVENUE:

(1) General Fund (GF) Base: The revenue base for each year represents the prior year’s estimated revenues.
Each year’s Total Revenue incorporates revised estimates for prior year receipts, adds revenue growth, and
subtracts revenue reductions to the GF Base.

(2) Total City revenue growth for outgoing years is estimated between 1.8 and 3.3 percent. Unless otherwise
noted, individual revenue sources reflect continuing growth in fiscal years 2023-24 through 2026-27 based on
historical average receipts. The amounts represent projected incremental change to the base. The revenue growth
amounts deduct one-time receipts from the estimated revenue growth for the following fiscal year.

(3) Property Related Taxes include all property tax revenues, Documentary Transfer Tax, Residential
Development Tax, and the redirection of ex-CRA tax increment monies. Assessed Value growth in property tax is
projected at 4.8 percent for 2022-23 based on assumptions for the full two percent inflationary adjustment to
secured receipts; stable unsecured and supplementary receipts; flat refund activity; and decreasing redemptions.

Documentary Transfer is a volatile revenue in particular when sales volume and price move together. 2022-23
revenue assumes slowing price growth and lower sales activity, resulting in a negligible drop in receipts. Outgoing
years assumes historical growth.

The Residential Development Tax is correlated with building permit activity. The 2022-23 revenue reflects average
annual revenue and permitting activity is assumed to remain stable in outgoing years.

Ex-CRA tax increment revenue growth is irregular. The estimate for 2022-23 is partly based on the Recognized
Obligation Payment Schedule (ROPS) and includes additional one-time miscellaneous revenue from surplus
property sales. Growth in subsequent fiscal years align with property tax growth assumptions.

(4) Business tax estimates for 2022-23 reflect the recovery and subsequent return to average growth in receipts
from non-cannabis activity and negligible growth in cannabis-related business activity. Outgoing years assume
high, but decreasing, growth.

Sales tax revenue estimates reflect recovery from the pandemic-driven recession with subsequent years
representing a return to pre-pandemic growth.

(5) Electricity Users tax revenue is based on estimates provided by the Department of Water and Power. 2022-23
and outgoing years assume pre-pandemic average growth.

Gas users tax revenue for 2022-23 accounts for the final year of a three-year rate reduction stemming from a
class-action lawsuit settlement. Consumption and prices are assumed to remain stable in 2023-24 and
subsequent years.

The decline in communication users tax (CUT) revenue has accelerated with strategic wireless plan pricing and
decreased landline use. 2022-23 and outgoing years assume an ongoing drop in CUT receipts.

(6) The projected revenue growth in departmental receipts inclusive of License, Permits, Fees, and Fines are
dependent on policy decisions to increase departmental fees, collect full overhead cost reimbursements on
Special Funds with sufficient capacity to do so, and increase reimbursements for those funds that have historically
received a General Fund subsidy. 2023-24 estimates assume higher growth in receipts to return to the pre-
pandemic level with growth slowing to 3.0 percent in outgoing years.

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