REVENUE AND 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. Refuse revenue is based on an established charge per truck. 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 2019-20 and 2020-21, franchise tax revenue is estimated at $9.3 and $9.5 million, respectively. This is a year-over-year increase of 5.2 percent in FY 2019-20, and 1.8 percent in FY 2020-21. Electrical-related revenue is the largest component of the City’s Franchise Tax revenue. While residential population is increasing, cable franchise revenue is estimated to remain relatively flat due to the increasing prevalence of alternative entertainment options including satellite television and online streaming service subscriptions. Refuse revenue estimates for FY 2019-20 and 2020-21 are higher than the FY 2018-19 Budget, due to increases in residential development and per ton host fees paid to Irvine for waste importation.
FY 2019-21 Proposed Budget
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