Transcript Sales Tax Trends and Forecast & Triple Flip Wind Down

Bobby Young, Principal, HdL Companies
SCACA – Property Tax Managers’ Sub-Committee Conference
February 4, 2015
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AN EXACT SCIENCE!
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• HdL receives approximately 98% of
the statewide sales tax data each
quarter for clients and some nonclients
• With data for all major categories –
use as the starting point to identify
past trends then factor in current
economic conditions
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7,000,000,000
6,500,000,000
6,000,000,000
5,500,000,000
5,000,000,000
4,500,000,000
4,000,000,000
3,500,000,000
3,000,000,000
* - projected
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1,600
1,400
Millions
1,200
1,000
800
600
400
Autos
Building
B&I
Food
Fuel
GCG
Restaurants
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Adjusted Revenue - Fuel Prices vs. Consumption
Percentage Change 2001 - 2015
50.0%
40.0%
30.0%
Percentage Change
20.0%
10.0%
0.0%
1Q01
1Q02
1Q03
1Q04
1Q05
1Q06
1Q07
1Q08
1Q09
1Q10
1Q11
1Q12
1Q13
1Q14
1Q15
-10.0%
-20.0%
-30.0%
-40.0%
-50.0%
Adjusted Database Revenue
Fuel Prices
Consumption
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• Shale oil & fracking on global production
• Bakken Oil Formations in North/South Dakota and Canada
• OPEC and Saudi Arabia’s decision on future
production
• ISIL/ISIS and conflict in the Middle East
• Future/continued sanctions on Russia
• National political interests
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• Offset effect of lower gas prices on General
Consumer Goods and Restaurant categories
• Federal interest rate changes may affect long
term financing options thereby purchases
• More online shopping shifting tax dollars from
local point of sale to distribution centers and
countywide pool allocations
• Possible expansion of the sales tax base by way
of legislative action
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• Originally created to finance State Economic
Recovery Bonds (Prop 57) because Wall Street
wanted a dedicated revenue stream
1. Decrease monthly sales tax allocations from
1% to 0.75%
2. Counties transfer from ERAF to SUTCF then
pay cities & counties their 0.25%
3. State General Fund reimburses County’s
ERAF for schools (if needed)
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• Bonds paid off July 2015
• Department of Finance (DOF) to advance for 2nd
Quarter 2015
• Continue to take ¼ cent in 3rd Quarter and 4th
Quarter 2015
• Reimburse 3Q & 4Q and “true up” 2Q, 3Q & 4Q by
May 2016
• Return to full 1 cent Bradley-Burns allocations in
March 2016 (1Q16 advance)
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• July 2015 – Bonds Paid Off
• September 2015 – DOF calculate 2nd
Quarter 2015 advance and provide notice
to County’s of estimated advance amount
(equivalent of 1 quarter)
• January 2016 – Counties pay agencies
SUTCF advance
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• March 2016 – DOF & BOE calculate 2Q
clean-up, 3Q & 4Q reimbursement
amounts
• April 2016 – provide notice to Counties of
final amounts to pay agencies
• May 2016 – Counties pay agencies final
SUTCF amounts
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• Most of 2Q15 will be accrued back to FY
2014-15 – ¾ cent as usual
• Many agencies will likely see a one-time
“bump” in FY 2015-16 due to:
• 2Q15 clean-up as part of May 2016 final payment
• Increase of FY 2015-16 year end accrual compared to
FY 2014-15
Full 1 cent allocation vs. ¾ cent allocation
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Bobby Young, Principal, HdL Companies
SCACA – Property Tax Managers’ Sub-Committee Conference
February 4, 2015
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