AgdaPkt 2019-02-25 Joint SA PFA - Laserfiche WebLink

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8.13. - Page 16 of 122 Muniservices, is projecting an economic slowdown during FY 2020-21 through FY 2021-22. In the later years, sales tax revenues are estimated to increase by 4 percent annually, and then flatten out to approximately 2 percent annually. The U.S. Supreme Court's ruling in Wayfair v. South Dakota allows states more authority to require out- of-state sellers to collect use tax. The California Department of Tax and Fee Administration has announced that it will require out-of-state retailers to collect and remit use tax beginning on April 1, 2019 if a retailer has California sales of more than $100,000, or 200 separate transactions. The effect of the U.S. Supreme Court's decision on the City's sales tax revenue is still being determined, but it is possible that this change will provide a slight increase to sales tax revenues received by the City. Transient Occupancy Tax (TOT) revenues are expected to increase in FY 2018-19 due to the high level of business travel in Silicon Valley and rising hotel occupancy rates. Limited data is available for projections at this time, and for that reason, projections for FY 2019-20 and beyond will include a conservative 1 percent increase. A planned major hotel, estimated for completion in 2021, should generate additional TOT revenue. Even so, in anticipation of a recession, the TOT projections remain conservative. Utility Users' Tax (UUT) revenue is expected to increase by 1 percent in FY 2018-19. Through FY 2020-21, UUT growth will remain very modest. Beginning in FY 2021-22, it is anticipated that this revenue stream will flatten out and then slowly decrease. As interest in traditional cable services declines, and as an increasing number of households "cut the cord" of their cable provider, it is prudent to forecast conservatively for future UUT revenue. By City Council policy, UUT revenue has been dedicated to capital projects and is not reflected in the chart below depicting major General Fund revenue sources. 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Projected Property Tax, Downtown Property Tax, Sales Tax, and TOT (in thousands) 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28 28-29 ■ Property Tax ■ Downtown Property Tax Sales Tax ■ TOT City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 242