5A Public Hearings 2019 0603 - Laserfiche WebLink

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MAJOR GENERAL FUND REVENUES BUSINESS LICENSE TAX A tax receipt (referred to as a “business license”) is issued each year upon payment of a Business License tax, which is typically an amount based on an annual base fee plus a unit fee, or a flat annual fee depending on the type of business. The Business License must be renewed on January 1st each year, and the required tax is delinquent if paid after February 28th. On November 8, 2016, San Leandro voters approved Measures OO and NN that impacted business license taxation. Measure OO changed the basis for taxation and increased some business license taxes such as parking lots and warehouses. Measure NN added an ongoing tax of up to 10% of gross receipts for cannabis businesses. On April 3, 2017, City Council approved 6% of gross receipts for 2017 and 2018, increasing to 7% in 2019, and increasing again to 8% in 2021 for the cannabis dispensaries. The revenues generated from these ballot measures will provide shelters for abused women and children, enhance safety net programs for homeless and at-risk adults and children, fix potholes and repair city streets, improve 9 -1-1 emergency response times, attract new businesses and create jobs, and enhance park, walking and running trails in San Leandro. Analysis Factors that affect the business license revenue are:  Number of business renewals;  Commercial and industrial growth rates;  Attraction/loss of businesses;  Economic growth in the Bay Area;  Business License Holidays deemed by City Council;  Results of Finance business license collection activity; and  The Finance Department audit programs Forecast The business license revenues are expected to decrease by 1.5% in 2019-20 and 2020- 21 over the current year due to an anticipated recession. From 2021-22 through 2026-27 increased revenues range from 0% to 5.7% assuming an economic turnaround and CPI increases. In 2027-28 another possible recession is included in the forecast. Actual Projected 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 BL Collections $6.5 $6.6 $6.5 $6.4 $6.4 $6.7 $7.0 $7.4 $7.6 $7.7 $7.6 $7.6 Cannabis 0.0 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 Total Collections 6.5$ 7.1$ 7.1$ 7.0$ 7.0$ 7.3$ 7.6$ 8.0$ 8.2$ 8.3$ 8.2$ 8.3$ $ Change 0.8 0.1 (0.1) (0.1) - 0.3 0.3 0.4 0.2 0.1 (0.1) - % Change 14.0% 1.5% -1.5% -1.5% 0.0% 4.7% 4.5% 5.7% 2.7% 1.3% -1.3% 0.0% Proposed Projected Revenue (Dollars in Millions)BUSINESS LICENSE TAX & PENALTIES and CANNABIS 59 81