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City staff flags long‑term sales‑tax pressure; gasoline receipts dominate Calimesa totals
Summary
Staff told the council that gasoline sales make up a large share of Calimesa's sales tax base and that long‑term trends — electric vehicle adoption and online retailing — will likely flatten sales tax revenue; the city should plan conservatively for FY26.
City staff gave the Calimesa City Council an informational presentation on March 3 about third‑quarter 2024 sales‑tax receipts and long‑term revenue trends that will affect the fiscal‑year 2026 budget.
The staff presentation and HDL (consultant) data show that gasoline sales are Calimesa's largest sales‑tax category — roughly one‑third of receipts — making the city's revenues sensitive to fuel prices and consumption trends. Staff warned that adoption of electric vehicles and state/federal fuel‑efficiency mandates will put downward pressure on gasoline‑related sales tax.
Nut graf: Because gasoline makes up a disproportionately large share of the city’s sales tax, staff advised planning for flat sales tax receipts in the coming year and diversifying the city’s tax base through targeted economic development. The council was also briefed on the lag in sales‑tax reporting and confidentiality limits on underlying data.
Staff said the city currently receives about $1.65 million in sales tax annually and that an annualized shortfall of approximately $115,000 (if the recent quarterly decline persisted) would affect ongoing revenue assumptions. The presentation noted that retail patterns have shifted toward online sales and that fulfillment centers, not brick‑and‑mortar retail, have produced spikes in other nearby cities.
Ending: The council received the report and gave staff direction to consider the sales‑tax outlook in the FY26 budget process and in economic‑development planning; no council action was required.
