FY22 Local Revenue
Local revenue includes revenue from excise taxes, payments-in-lieu-of-taxes, licenses and permits, fees and fines, investment income, and available funds. The City is projecting $433.6 million in FY21, reducing the budget significantly as the COVID-19 pandemic and the economic recession impacted collection. In FY22, the budget for these sources is increasing to $435.0 million, assuming a slow return to normal.
Local receipts, or revenue the City is able to generate locally, includes items like excise taxes, fees, fines, and permits. This vital revenue source generally follows the City’s overall economic health and is projected to increase by $1.4 million or 1.5% in FY22.
As the City enters an uneven economic recovery brought on by the COVID-19 pandemic, caution was used in budgeting these receipts. In FY22, the Administration & Finance Cabinet will continue to work with departments Citywide to review collections, understand revenue drivers, and maximize revenue recovery efforts.
The graph to the right shows the share of each category within this revenue source.
Recurring Local Receipts by Type
FY21 is projected amount and FY22 is budgeted amount.
An excise tax is a tax applying to a specific industry or good.
The largest excise tax collected for the City is the local room occupancy excise, levied on occupancy of hotel rooms, motel rooms, and short-term rental units. In addition to the local tax, the State collects a 5.7% excise tax and a 2.75% fee, transferred to the State’s convention center fund, for a total tax from all sources of 14.95%.
The FY21 budget was reduced to $37.0 million in local room occupancy collections, a significant decline compared to previous years, due to the economic impact COVID-19 had on travel and tourism. The FY22 budget assumes a slow return to normal business, with $41.0 million in room occupancy excise.
Other excise taxes projected to be affected by COVID-19 due to business closures, reduced tourism, and an economic slowdown include:
- Meals - 0.75% local excise on meals
- Jet fuel tax - 5% of the average sales price, but no less than five cents per gallon
- Motor vehicle - an excise in lieu of property tax on motor vehicles, $25 per one thousand dollars of vehicle valuation
See below a table summarizing all excise taxes the City collects.
|Categories||FY20 Actual||FY21 Budget||FY22 Budget||Difference in $$||Difference in %|
|Vehicle Rental Surcharge||$1,573,276||$700,000||$1,100,000||$400,000||57.1%|
|Community Host Agreements||$119,870||$1,250,000||$1,250,000||$0||0.0%|
In FY20, the City issued 1 million parking tickets, 205,000 or 16% less than in FY19. The FY20 collection rate remained high at 92%.
Major factors contributing to the City’s successful collection rate include:
- Non-renewal of violator’s registration and license by the Registry of Motor Vehicles until penalties are paid
- Increased ability to recover fine payments from rental agencies
- Systematic collection of fines for company cars and leased vehicles
The City also contracts with a third-party vendor to collect delinquent fines from out of state vehicles and other hard-to-reach offenders.
The City collected parking fines revenue of $70.1 million in FY19. In FY20, issuance and collection was affected by COVID-19, starting in March 2020, as many businesses were closed throughout the City and traffic into the City was reduced. Total FY20 parking fines revenue collection decreased to $62.7 million. The FY21 budget includes $57.6 million in parking fines revenue, and the FY22 budget includes $55.9 million.