Operating Budget 2012 - 2014 - City of Daly City

valuation. Fiscal 2010 saw an overall adjustment in assessed values for certain residentialproperties in San Mateo County. The Assessor's Office compared all residential propertysales that took place from 2002 to 2008. If the sales price of a property was greater thanthe current sales price for a similar property in January 2009, the assessed value waswritten down to match. The result was that for the first time total assessed value actuallydecreased.This has established a new property tax revenue base going forward, which is having alasting effect on the City'S primary General Fund revenue source.Sales TaxSales tax is a difficult revenue to budget, and has been further complicated by the State"Triple Flip" which swapped sales tax from the cities to the State. The State was then toback-fill local revenues to the level they would have been had there been no swap.Unfortunately, the State's revenue estimates were flawed for fiscal 2008, producing toomuch back-fill. In fiscal 2010, the State reversed that mistake, causing total sales taxrevenues to decline at a much greater rate than the amount of tax actually generated.All this leaves us with what appears to be a high level of growth in fiscal 2011. In fact,after allowing for the misallocation of revenues by the State, sales tax increased by only1.5% in fiscal 2011, followed by a bit more estimated growth in 2012 at 2.3%. Movinginto the next two budget years, some recovery is expected in fiscal 2013, followed bymoderate growth in fiscal 2014.Total Sales Tax12,000,000-r------------------------r 15.0%10,000,00010.0%~8,000,000J:~ 0.0%~ i6,000,000 0III ...(!)~10-5.0%~(J) 04,000,000-10.0%2,000,000-15.0%'06 '07 '08 9 10 11 12 13 14-20.0%XVlI I