REVENUE & EXPENDITURE ASSUMPTIONS
FRANCHISE TAX
Description Franchise tax revenue consists of a tax on four franchise operations in Irvine: electric, gas, cable television and refuse. The State of California sets electric and gas tax rates that equal 1 percent of gross annual revenues and 5 percent of gross cable television revenues from within the City of Irvine. Electrical-related revenue is the largest component of the City’s Franchise Tax revenue due to the nature and rates of electricity compared to the other Franchise Tax revenue categories. Refuse revenue is based on an established charge per truck by Waste Management of Orange County. Trend Over the long term, revenues have increased slightly with growth in the City’s residential population and business activity. Revenues are also impacted by changes in gas and electric pricing along with changes in weather patterns. The revenues will fluctuate based on gross billing by the companies listed above. Outlook For FY 2023-24 and 2024-25, franchise tax revenue is estimated to be $10.7 and $11 million. The growth in Franchise Tax is due to increases in gross receipts from franchise operations. While residential population is increasing, cable franchise tax is estimated to decline due to the increasing prevalence of alternative entertainment options including satellite television and online streaming service subscriptions.
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FY 2023-25 Adopted Budget
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