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Sales-tax update: Monterey's initial 6.6% rise before adjustments leads to flat year-over-year Q3 result
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Summary
Rafaela presented Q3 (July–September 2025) sales-tax results showing an initial 6.6% increase for Monterey before HDL adjustments that left the city flat year-over-year; restaurants made up the largest share (about 42%); committee members asked about a top-25 producer and how county 'pools' affect distributions.
Rafaela summarized the quarter-to-quarter sales-tax comparison for July through September 2025 versus 2024. She said the statewide 1% sales-tax growth was about 1.9%, the county was up about 3% and Monterey initially showed a 6.6% increase before HDL adjustments reduced the reported growth to essentially flat for the year.
She explained that some adjustments reflect timing (late or double payments across quarters), audit corrections or allocation disputes between jurisdictions. She noted restaurants comprised roughly 42% of the taxable business groups in the packet, with consumer goods and other categories making up the remainder.
Committee members asked about an entry on the top-25 producers list identified as "Fuji Medical Systems." Rafaela said top-25 names and ranks are confidential; she cautioned that a one-time large medical-equipment purchase can move a business substantially in a given quarter. Regarding ‘pools,’ Rafaela explained that some online and pooled sales are distributed by county according to weighted formulas rather than by the point-of-sale city.
After discussion the committee voted unanimously to receive and approve the Q3 sales-tax update.
Next steps: staff will continue to monitor adjustments and will provide additional context if specific unusual adjustments (such as a large equipment transaction) change future quarter comparatives.
