Carlsbad economic update: GDP stable, sales tax dips and city readies FY27 budget

City staff presented a quarterly economic and financial update showing a mixed picture: Carlsbad’s gross domestic product remains strong (staff cited approximately $18.6 billion), employment indicators held near 4% unemployment and job postings increased modestly, while sales tax revenues fell compared with the prior year.

Rachel Maltz, the city’s senior program manager, highlighted tourism gains and hotel occupancy rebounds in the first quarter of the year. Tess Sangster, the economic development director, and Zach Korach, the finance director, reviewed economic trends and general‑fund performance: property tax was up about 3% (roughly $1.7 million) while sales tax declined about $4.1 million year‑over‑year (a 9% drop in one comparison), driven by weakness in autos and general consumer goods even as business‑to‑business collections rose in the medical/biotech cluster.

Staff noted the city’s investment portfolio is approaching $1 billion and produces investment income that reduces pressure on local taxes. Korach said the general fund’s year‑to‑date revenues were down 0.3% overall but explained that fluctuations across categories—combined with the recent taxpayer audit correction that had previously inflated sales tax receipts—affected comparisons. Staff will present the preliminary FY27 budget at the next council meeting and said conservative revenue estimates will be applied.

Council members thanked staff and asked follow‑up questions about assumptions, the size of the sales‑tax correction and whether household‑spending data at the city level are available. Staff said some data come from external partners (e.g., Visit Carlsbad for lodging metrics) and promised to return with additional detail as requested.

Next steps: the city will present the proposed FY27 preliminary budget at the next council meeting and continue monitoring revenue trends.