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Sales-tax consultant: post-pandemic surge fading; Measure X revenues flattening
Summary
HDL's sales-tax consultant told the Measure X oversight committee that statewide and local sales-tax growth has flattened after post-pandemic gains and that Measure X receipts for Santa Ana fell in FY 2023–24.
Santa Ana's newly contracted sales-tax consultant, HDL, told the Measure X Citizen Oversight Committee that statewide trends contributing to Measure X receipts are "relatively flat" after the post-pandemic spending surge and that local Measure X revenue fell in the last fiscal year.
"Your greater, your bigger takeaways are 1, it's relatively flat," said Bobby Young of HDL during a data-driven presentation on consumer and sector trends that drive local sales-tax collections. Young walked the committee through statewide Bradley-Burns data and the industry groups that most affect city receipts: general consumer goods, business and industry, autos and a countywide use-tax pool for out-of-state shipments.
Young highlighted several factors behind the recent moderation in growth: higher interest rates that damp consumer spending, slowing new auto sales as financing costs rise, and price-driven shifts in restaurant spending following AB 1228 (a fast-food minimum-wage increase). He noted that Measure X's local mix is diversified across several major industry groups, which provides some stability but does not insulate the city from broad declines.
The consultant presented local Measure X results showing a 3.2% decline in fiscal year 2023'24 and said the firm's latest estimate for Measure X receipts is about $82.8 million for the current forecasting period, down from an earlier estimate used in the city budget of $85.6 million. City staff subsequently told the committee they expect to recommend a revenue adjustment of about $2.7 million during the midyear budget update.
Committee members asked HDL whether the trends were uniform across jurisdictions; Young said results vary by a city's tax base (for example, areas heavily dependent on auto dealerships have been more affected). He also described how online purchases and buy-online, pick-up-in-store practices shift where tax revenue is recorded and encouraged local strategies that keep resident spending in the city.
The committee received the presentation as background for its March midyear review of Measure X budgets and allocations.
