Dublin is looking at roughly $750K-$1.5M less in revenue for fiscal year 2008-2009 than was initially expected due primarily to a drop in estimated sales tax, property tax, and development-related fee receipts. City Hall has already taken the following steps to address the projected general fund budget deficits:

• Saved Dublin’s taxpayers $110K for the 2008-2009 fiscal year by eliminating the vacant Community Development Administrative Aide position;
• Considering the possibility of raising developer and business “fees for service” to reflect inflation over the past few years;
• Evaluating the option to repurpose special funds for projects and purchases that cannot be deferred;and
• Created a sales tax reimbursement program to encourage businesses generating at least $100K of new net sales tax revenue to move to Dublin (or expand within Dublin).

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Dublin is looking at roughly $750K–$1.5M less in revenue for fiscal year 2008–2009 than was initially expected due primarily to a drop in estimated sales tax, property tax, and development-related fee receipts:

• $(115K) due to reduced state funding
• $(500K) in sales tax. The lion’s share of Dublin’s sales tax is derived from automobile and general consumer retail sales. Both sources were 35% and 30% of total sales tax receipts for the 2007–2008 fiscal year, respectively. While sales at discount retail stores like Target and Dollar Tree have held up fairly well, auto sales have dropped precipitously and have not been offset in other areas. This shortfall is the risk of relying on tax revenue from cyclical items such as automobile sales.
• $(300K) in property tax. This projected loss is due primarily to a reduction in the assessed values of recently purchased homes (Alameda County automatically reduced the values for homes purchased between 7/1/04 and 12/31/07) and late payments by homeowners that will be received in future periods.
• $(170K) in hotel tax
• $(415K) in building permit revenue. This number may go up if developers have trouble securing project financing. As with auto sales, Dublin is highly reliant on building permit and impact fees. This “big ticket” reliance makes our city highly-levered to the swings in the state and national economy. In sports terms, this economic development strategy is like having a baseball team that can only score runs by hitting doubles and home runs.

The projections for fiscal year 2009–2010 are even more dire given the State of California is battling a deficit of $15B for the current year and over $25B for the next fiscal year. While the City of Dublin does not rely as heavily on the state for funding as does our school district, some of the “solutions” proposed by the California legislature include borrowing up to 8% of property tax revenues that would normally flow to cities like Dublin. This borrowing would create a $2M deficit in Dublin’s 2009–2010 budget.