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8A CITYWIDE SALES TAX REVENUE PROJECTIONS UPDATE Page 2 For the four consecutive quarters ending March 31, 2009 (the most recent data available) sales tax revenue from new and used vehicle sales was down $850,000 (or 220/0) compared to the same period ending March 31, 2008. Staff expects sales tax revenues from auto dealerships to further erode, as the full impact of the Dodge dealership (which closed in the fall of 2008) is not reflected in these amounts. Although staff expects an increase in the third quarter 2009 sales tax revenue from automobile sales due to the Federal"Cash for Clunkers" rebate program, it is too early to tell if this is merely a one-time "blip" or if this will signal an ongoing resurgence in vehicle sales. Total locally generated sales tax revenues for the first quarter of 2009 were $3.4 million which is about 13010 - or $500,000 - below the first quarter of 2008. At this point in time, with three quarters of sales revenue received from FY 2008/09, staff projects sales tax to come in around $15.9 million. This is about $3.5 million less than the $19.4 million that was expected when the FY 2008/09 budget was adopted in July 2008. Towards the end of September, staff will learn the total sales tax cash received for the second quarter of 2009, followed four to six weeks later by the detailed data which will provide the amounts generated by each business along with an understanding of any large one-time only adjustments that may have affected the total cash receipts. DOWNTOWN The first quarter 2009 sales tax from the downtown area was $188,000 which was $36,000 or 17% less than the amount received in the first quarter of 2008. In the four consecutive quarters ending March 31, 2009 sales tax generated by downtown was $850,000 while $937,000 was produced the four consecutive quarters ending March 31, 2008. Sales tax from downtown businesses accounts for about 5.60/0 of total City sales tax. Restaurants account for about 21 % of sales tax revenue generated in the downtown area. The sales tax revenue from this group of businesses has declined 50/0 over the past year. This parallels the citywide results from the restaurant category which was down 4.3010 over the same time period. OTHER REVENUES Business License Tax On July 13, 2009 the Council approved placing the proposed business license tax increase on the November 3, 2009 ballot. This measure will require approval from a simple majority of the voters casting ballots at this election. If approved, the general fund should receive about $650,000 per year in additional business license revenues by FY 2012/13 when the proposed tax rate increases are fully implemented. Property Tax By late October, the Finance Director will receive the "levy letters" from the County of San Mateo Controller's Office. These letters will provide staff with the amount of property taxes, secured and unsecured, that have been levied for FY 2009/10 and generally are a very good indicator of the amount of property taxes the City should receive each fiscal year. Staff will compare the amounts on the levy letters to the amounts budgeted and will report any significant discrepancies to the Council. During the first several months of 2010 the City will receive periodic updates on the development of the assessment roll which will produce the FY 2010/11 property taxes. Staff is very concerned about the FY 2010/11 property taxes as real estate transaction activity - as measured by property transfer tax revenue - appears to be very low. With