Upland City Council forecasts $1.7M drop in sales tax for next fiscal year

The City of Upland's Special Finance Committee convened on April 30, 2025, to discuss critical financial updates and projections impacting the city's budget. The meeting began with a review of the city's sales tax projections, revealing a significant anticipated decrease of $1.7 million for the upcoming fiscal year. This decline is attributed to broader economic uncertainties affecting revenue streams.

Committee members highlighted the need for budget adjustments to counterbalance the expected drop in sales tax. One proposed strategy involves increasing revenues from investment income, which has been bolstered by higher interest rates. The city has been strategically extending the duration of its investments to maximize returns, which has resulted in a more stable income compared to previous years.

The discussion then shifted to a sales tax update, focusing on the third quarter of 2024. It was noted that while the automotive and transportation sector saw an increase, the building and construction sector experienced a slight decline. Overall, sales tax trends in Upland have remained relatively static, mirroring patterns observed at the county and state levels. The state reported a 2.3% decrease in sales tax during the same period, indicating a potential shift in the economic landscape.

The committee also addressed the volatility of the building construction sector, emphasizing its sensitivity to economic fluctuations. Members acknowledged that while gasoline tax revenues have decreased, this is beneficial for residents but poses challenges for city finances reliant on such taxes.

In conclusion, the meeting underscored the importance of proactive financial management in light of declining sales tax revenues. The committee plans to further explore budget adjustments and revenue enhancement strategies in the upcoming budget workshop scheduled for May 19.