Budget Surplus
April 25,2025
While other cities including Fresno and Los Angeles see a big drop off in their all important general fund budgets, Visalia is again projecting a healthy surplus in the current fiscal year and next.
Visalia Dept of Finance staff has long backed a conservative approach to revenue projections but the latest estimate surprises to the upside as it has on multiple occasions in the past.
The latest projection announced at an April City Council study session, the Mid-Year Budget projections for the 24/25 budget had anticipated revenues of $101.2 million. But now Finance is expecting revenue of $107.6 million – $6.4 million more than had been expected.
Finance is suggesting council add more to the emergency reserve fund at the city from $22.7mil to $25.8mil as the city has expanded the fund from 25% to 30% of operating expenditures
This latest upside projection is based not so much on higher expectations for sales tax but on other revenue, primarily property tax -up $3.7 million more than anticipated.
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Finance is projecting sales tax to be $46.4 million by June- only $300,000 more than expected. The report says to expect, actually “no sales tax growth.” By comparison city sales tax surged in the Covid years including 21/22′ x 29%, A more modest 15-year trendline at the city shows sales tax growth on average of 5.5%. The latest city projection for sales tax growth in 25/26′ is just one percent and 2% in years after that.
Sales tax and property tax revenue make up 78% of Visalia’s General Fund.
Council members generally back the city’s conservative approach to these estimates, noting that uncertainty in the economy right now is at a high-level. While the April report mentions some of these factors, tariffs is not included, even though it’s at the top of the list right now, One major factor is the slowdown in homebuilding across the nation and including in Visalia on the other hand, a large pipeline of new homes is awaiting permits by multiple national and local builders after a number of annexations opened more land for development.
Tulare County commercial construction at five-year low
Commercial construction in Tulare County is at a five-year low through mid-April 2025 when compared to the same period in the past few years.So far about $58 million in commercial construction has been permitted through April 15 of this year; that compares to $100 million in the same period in 2024, $79million in 2023, $244 million in 2022 and $85 million in 2021.
The slowdown reflects reduced construction in the Visalia Industrial Park as well as on Mooney Boulevard in Visalia in comparison to past years.
Regarding home building the pace so far this year is similar to the pace in the past five years with 349 single family homes permitted so far in the county this year compared to 357 in 2024, 240 in 2023, 367 in 2022 and 339 during the same period in 2021. All figures are from Construction Monitor.