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May 2010

The recession has impacted every local government in the state of California, with steep declines in property tax revenue and sales tax revenue. Half the general government revenue for all cities in California comes from property and sales taxes, which makes budgets quite sensitive to changes in these streams.

The purpose of this update to the 2005 Center on Policy Initiatives publication “The Bottom Line” is to establish a pre-recession baseline for San Diego general government revenue relative to other large cities in California, using the latest comparable data source from the California State Controller. These data coincide with fiscal year 2006-07, prior to the onset of the current recession in December 2007.

The data shows that the City of San Diego continued to lag behind other large cities in California in most general fund revenue sources, including property tax, sales tax, transient occupancy tax, trash fee/tax and business license fee/tax. The City took in more revenue in 2006-07 than in 2002-03, but much less than other cities, though the regional economy was doing well.

This update also contains new information on property taxes and business license fees/taxes to supplement the charts in the previous report. This analysis does not include revenue sources that are not general governmental, such as special assessment districts (including the Tourism Marketing District), facilities benefits assessments, impact fees (including linkage fees) and enterprise revenue (including water fees).