OVERALL FINANCIAL HEALTH OF THE CITY
#3. Taxes
Background: For roughly 40 years - except for one year (FY 18-19) when Measure D failed and Measure E had not yet been approved - PVE has relied on a Parcel Tax to fund a sizable portion of the City’s operations. The current Measure E Parcel Tax covers roughly 20% of the City’s expenses and approximately 70% of PVE PD costs (FY 22/23 budgeted cost of $7.1 million), not including $2.8 million in associated pension liability. It expires in FY 27-28. Together, the Parcel Tax and revenues from regular property taxes account for 60% of the city’s income. Using the average increase in regular property tax revenue over the past 20 years, it is doubtful that annual increases will exceed 5% going forward, and the increase may be lower if there is a decline in the housing market. Considering that taxes are generally the least palatable method of raising revenues in the eyes of residents, answer the following.
Question: What is your view of tax policy for the City and how tax revenues should be balanced among other sources of revenue such as those mentioned in question 1 above, most of which also engender some resident opposition? How should the City prepare for the future loss of revenue from Measure E?