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Measure X Sales Tax Update - Mid-Year Budget Report 2017/18

Measure X is a new source of local sales tax revenue that will sunset in 2037. The one-percent tax was approved by voters in 2016 and implemented citywide by the State Board of Equalization (BOE) on April 1, 2017. The additional one percent brings the total local sales tax rate up to 8.75 percent. 

A budget adjustment increasing projected current-year Measure X sales tax revenue by $1 million can be found in the General Fund Revenue Summary section of the FY 17/18 Mid-Year Budget report. Upon adjustment, the current-year revenue expectation will total $9.5 million. In addition to the $9.5 million, the city also received $1.93 million last year that was not spent. Of the available $11.43 million in Measure X resources, all but $1.26 million has been earmarked by the City Council for a specific purpose. A listing of those earmarks is reflected in Attachment C below. The attachment also captures preliminary future-year earmarks for the coming two fiscal years; however, the City Council has not formally committed future-year resources for any specific purpose, so future-year pledges are subject to change. 

Current-year earmarks are summarized in the following graph by expenditure category. While funds have been generally appropriated for Public Safety, Economic Development, and City Facilities and Equipment, the bulk of the funding has been set aside for transportation projects including: bridge repairs, street improvements, existing and future highway interchanges, sidewalk upgrades, and traffic signals. 

The following stacked area chart illustrates cumulated Measure X commitments over the next five years. Areas of the chart are filled with color to represent financial obligations, by expenditure category, over an expected time period. Each expenditure category is plotted as a line with color fill followed by the second expenditure category, and so on. The expenditure categories are color coded representing Public Safety (blue), Economic Development (Red), Facilities and Equipment (green), and Transportation Projects (purple). The grey filled area represents the value of unobligated Measure X resources between now and FY 21/22.

A quick review of the chart shows diminishing future-year obligations relative to a large number of current-year commitments. This chart will drastically change in the coming months as the City Council, with the help of the Citizens’ Finance Advisory Committee, prioritizes and approves additional future-year projects. The number and cost of worthy projects exceeds the level of resources made available through Measure X. Prioritizing will undoubtedly be a rigorous process as road improvements are weighed against park improvements, bridge seismic retrofits, interchanges, sidewalks, storm drains, traffic signal synchronization, and facility needs. 

 

 

( FY 17/18 Mid-Year Budget report )

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