Tuesday, November 29, 2022

City Tax Revenues Decline

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The City of Santa Barbara received $5.6 million in sales tax revenue during the quarter ended December 31, 2020, which is 12.6% below the same quarter last year. This decline is largely a result of reduced economic activity due to the COVID-19 pandemic and related response, which has affected nearly all economic sectors in the economy. Santa Barbara being a tourist based economy, the general retail and restaurant sectors have been particularly affected.

As the second largest General Fund revenue, the sales tax budget for fiscal year 2021 is $22.2 million. Staff are projecting sales tax revenue to end the fiscal year at approximately $21.0 million, approximately 5% less than the budget. Sales tax results for the March quarter will be available in May 2021.

The City of Santa Barbara collected $348,987 in transient occupancy taxes (TOT) for January 2021. TOT revenues in January 2021 were 68% below January last year.  The COVID-19 pandemic and the related response has significantly affected the local travel industry.  Despite a steady recovery since April 2020, lodging operators have experienced a difficult travel environment, as the most recent surge and additional State advisories against leisure travel have further depressed demand for accommodations.  Staff expect this reduction in demand to continue at least until the spring months.

The City has collected $7.6 million through seven months of the City’s fiscal year, which runs from July 1 through June 30.  The City’s adopted TOT budget is $17.2 million.  TOT is projected to end the fiscal year at approximately $14.5 million, which is 16% below budget.

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