Out of the over 450 cities in California,only Yountville is projected to receive insufficient stimulus funds, property tax revenue, and other tax revenue increases to cover its COVID-19 related revenue losses.
Last year we found that the sudden consequences of COVID-19 were significantly impacting cities that rely on tourism and entertainment for revenue.
But . . . The situation has significantly improved.
Economic projections show that revenues that took a hit during the pandemic are increasing.
Dollars in Millions
Note: Projected changes to California city tax revenues when compared to the prior year.
And theAmerican Rescue Plan Act of 2021 will deliver $8.2 billion to California cities to respond to the COVID-19 emergency. Cities can use this money to do things like ...
Cities can also use American Rescue Plan funds to replace public sector revenues lost due to COVID-19. Our analysis shows that the vast majority of California cities will receive more stimulus money than they lost during the pandemic.
Property tax revenues also increased across the State. Economic forecasts indicate that California cities will receive over $2.3 billion in additional property taxes between fiscal years 2019–20 and 2021–22.
In fact, by the end of fiscal year 2021-22, we project that five cities will have received revenue increases equal to at least one year of pre-pandemic revenues.
Because of these increased revenues, most cities are well positioned toincrease or improve services for residents or reduce taxes and fees.
However, we project that 18 cities did not receive enough stimulus funds to cover their COVID-19 related revenue losses.
* When also considering other tax revenue increases, only Yountville is projected to receive insufficient funds to cover its COVID-19 related revenue losses.
We based our analysis primarily on audited financial statements from cities, economic forecasts developed by a consultant, and estimated American Rescue Plan allocations from the California Department of Finance and the U.S. Department of Treasury.