– Sales Tax revenue up 3%
– Property tax monies climb 5%
Who is Visalia’s top taxpayer?
-February 6,2021-
Despite the COVID-19 pandemic’s effect on the economy and tough times for many municipalities, the City of Visalia collected $3 million more to run the city than they had budgeted according to the latest financial report shared with the city council this month.
The report covers fiscal year 2019 /20 that ended June 30, 2020 – more than 4 months into the pandemic.
“It certainly was a pleasant surprise” says Mayor Steve Nelsen “after there had been plenty of doom and gloom.”
Total revenues were $3 million higher than the final budgeted amount largely based on an unexpected increase in sales tax revenues – $1.9 million more than budgeted. The report says” the economy continues to have growth partially aided by Federal stimulus money put into consumers’ pockets due to the COVID-19 pandemic.”
Also impressive”property tax increased $2.3 million more than budgeted as valuation increased more than anticipated.”
Other budget funds were down including the city bed tax or Transient Occupancy Tax – $0.2 million less than budgeted as COVID-19 had a detrimental effect on the travel and hospitality industry enhanced by the lockdowns and travel restrictions imposed by the State of California.
Business licenses did increase $67,000 more than budgeted but subventions and grants was $2.3 million less than budgeted due to the City not yet receiving the funding from Prop 1B for the East side park basin project. However, the funds will be reimbursed when the project is completed. Also up was interest received from investments- $1.2 million more than budgeted due to higher interest earnings rates.
Here is a summary of revenues showing an overall increase of 2% over the prior year reduced in part by an 11.5% decline in hotel bed tax receipts.( see chart)
In their 20/21 budget, city staff expected COVID-19 would take a heavy toll on the local economy, affecting Visalia’s sales tax take. In their projection done June 1,2020, staff expected a 9% decrease in sales tax in 20/21 – down to only $30 million and just 30.3 million in the 21/22 fiscal year that will begin this July.
$4.5 million surprise
But as you can see the numbers for the 19/20 fiscal year was $34.2 million. In their earlier- more gloomy estimate – the city had expected the year’s sales tax to come in at only $29.7 million due to COVID. But it came in $4.5 million more!
Property tax revenue also beat expectation. They had figured $25.8 million for 19/20. But we now know that it came in at $26.3 million. Despite the pandemic, property values have been climbing across the state led by home valuations.It has been estimated that California’s median home prices increased over 8% last year. Tulare County’s median home price increased 17% between December 2019 and December 2020 says the California Association of Realtors.
Between sales tax and property tax revenue – the
“big two” add up to about 80% of the city’s general fund
Moving forward
Nelsen expects the trend to continue. Car and truck sales are doing well and now internet companies who do business in California like Amazon contribute sales tax to the city where the purchases are made.
As a result Mayor Nelsen expects the city to move forward on a number of capital projects including infrastructure at the industrial park, the police and city council chambers project, a homeless shelter and expansion at the airport to make it more of a business hub.
Largest taxpayer
Also part of the financial report – is the list of the city’s largest taxpayers and comparison of their rank back in 2011. Leading the pack is California Dairies Inc with their big plant in the industrial park valued at $162 million – up from $147 million in 2011.Number two is Perfection Pet Foods valued at $57 million, a company that was not around in 2011. Number three is Caldwell Mooney Partners who own the Sequoia Mall, the shopping center anchored by Dicks Sporting Goods ,the center at Mooney and Walnut anchored by Kohl’s with the total valued at $53.4 million. Number four is Graphic Packing INT at $53 million.The company is traded on the NYSE at GPK. They make paper cups and plastic lids for the food service industry. The company has done well in pandemic as take-out food and beverage has thrived. Number five taxpayer is California Water Service. Visalia Mall is just behind them.