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Staff warns recordation and impact taxes are volatile; FY27 PAYGO will compete with operating funds
Summary
OMB and finance staff told the committee that recordation taxes are forecast to recover toward the $80 million range in later years, while impact taxes are forecast lower (about $20 million reduction for transportation and $38 million for schools); staff emphasized FY27 PAYGO competes with operating budget dollars.
Presenters explained revenue assumptions that support the CIP, including PAYGO (current revenue), recordation taxes and impact taxes. A presenter explained PAYGO as "simply cash current revenue, which of course competes with the operating budget," noting any dollars placed in PAYGO reduce funds available for operations.
On recordation taxes, staff said forecasts show an increasing trend into later years and projected a school increment entering the $80,000,000 range in the later years of the six'year plan. OMB's Rachel Silverman said finance "came very close last year" to the recordation tax estimate. For impact taxes, staff noted continued reductions and showed a $20,000,000 reduction in transportation impact tax and a $38,000,000 reduction in school impact tax versus prior assumptions, and cautioned these revenues are historically volatile and sensitive to housing market movements.
