Milpitas reports 12.3% sales tax growth despite one-time payment impact

The City of Milpitas City Council meeting held on April 2, 2025, featured a detailed discussion on the city's sales tax performance, highlighting significant trends and projections for the upcoming fiscal year.

The meeting began with a presentation on the fourth quarter sales tax results, which showed an impressive increase of 12.3% for the Bradley Burns sales tax. This growth was noted as a positive deviation from the statewide trend, which has generally been declining. However, the discussion revealed that a substantial portion of this increase was attributed to one-time taxpayer payments amounting to approximately $526,000. This anomaly skewed the overall results, particularly in the business and industry category, which saw a staggering growth of 40.3%.

City officials cautioned that without these one-time payments, the actual growth in sales tax would have been around 5%, still positive but significantly lower than the reported figure. The implications of this adjustment were emphasized, as it would likely affect the city's pool share in the upcoming fiscal year, suggesting a decrease in revenue.

The presentation also provided a broader view of Milpitas' sales tax trends over the past thirteen years, indicating a total growth of 55.5%. Factors contributing to this growth included a rise in online sales and a robust industrial sector. Despite a dip during the pandemic in 2021, the city has seen a recovery, with sales tax levels remaining above pre-pandemic figures.

As the meeting progressed, council members were reminded of the importance of monitoring these trends closely, especially as adjustments for audit discrepancies and late payments are factored into future forecasts. The discussion concluded with a call for continued vigilance in financial planning to ensure the city can sustain its growth trajectory in the face of potential fluctuations in sales tax revenue.