While post-recession sales tax revenues continue to climb for the cities that make up southwest Riverside County, financial reports indicate they may be reaching a plateau.
In addition to property tax, sales tax is usually the greatest revenue generator for cities. Approximately 1 cent of every dollar spent locally is returned to general fund budgets, enabling cities to pay for important services such as public safety. Sales tax revenue can also be a good indicator of economic conditions.
“Murrieta’s sales tax revenues are going in the right direction…slowly upward. Sales tax revenues are essential to the provision of local government services. The improvement in sales tax revenues are an indication that market and economic conditions are starting to improve locally. This is certainly good news,” said Bruce Coleman, Economic Development Director
for the City of Murrieta.
The City of Temecula reported another strong fiscal year in 2012-2013, bringing in $27.7 million in sales tax revenue. While that was a 3.8-percent increase over 2011-2012, Temecula had experienced a 6-percent jump the previous year.
With auto dealerships and retail stores being among its greatest contributors, Temecula continues to exceed trends experienced throughout the state, county and surrounding areas. City financial analysts anticipate Temecula’s sales tax revenue will reach $29.36 million by the end of 2013-2014.
The City of Murrieta is projecting a year-over-year increase of 3.6 percent in sales tax revenue, compared to a 9-percent jump to $9.02 million in 2012-2013 from $8.27 million the previous fiscal year, according to figures provided by City of Murrieta Administrative Services Director Joy Canfield.
Murrieta had already banked $3.2 million in sales tax revenues during the first half of fiscal year 2013-2014, with its greatest revenue generators also being dealerships and retailers such as Walmart and Kohls.
Menifee projects it will finish the fiscal year with $5.36 million in sales tax revenue, up from $4.89 million in actual receipts for 2012-2013. Its big players are retailers such as Kohls and Target, as well as gas stations, grocery stores and restaurants.
Lake Elsinore projects it will bring in $8.03 million by the end of this fiscal year, an increase of 1.36 percent from $7.92 in 2012-2013. Revenues were also strong in 2011-2012, when local spending generated $7.16 million for the city of Lake Elsinore.
Wildomar ended 2012-2013 with $1.36 million in sales tax revenue, up from $1.23 million the previous year and $1.09 million in 2010-2011.
And in Canyon Lake, which brings in more in property taxes, $154,000 was generated in sales tax receipts in 2012-2013. That was down from $161,062.
In Temecula, revenue from sales tax greatly exceeds property tax. Murrieta also receives more in sales tax, but expects property tax revenue to increase as the economy continues to rebound. Likewise, Lake Elsinore sees more from sales tax than it does from property tax; whereas similar to Canyon Lake, the city of Wildomar has historically received greater returns from property taxes. The same is true for Menifee.