2013 economic outlook, revenue overview, & budget issues prepared for the salt lake county...
TRANSCRIPT
![Page 1: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/1.jpg)
2013 Economic Outlook, Revenue Overview, & Budget
IssuesPrepared for the Salt Lake County Council and Mayor
Darrin CasperDoug MacdonaldLance Brown
![Page 2: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/2.jpg)
2013 Economic Outlook & Revenue Overview
• Economic Outlook – Doug Macdonald
• Revenue Overview - Lance Brown
• Budget Issues – Darrin Casper
![Page 3: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/3.jpg)
Economic Outlook
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October2012
Forecast Review
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Utah Economy Improving Relative to U.S. in 2012
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First led by China and now Europe, world nominal GDP slowing down from 6% to 4.5%
Source: The Economist, October 5, 2012
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The U.S. economy (real GDP) slowing down to just below 2%
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Business Equipment & Software will increase 6.6% in 2012, slowing down
from 10%
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Unemployment claims, leading indicator for jobs, now below 2001-02 recession levels
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Salt Lake County employment growth shifting into 3rd gear
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Utah Wages Shot up over 6%in the First Half of 2012
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Utah Residential Construction up 15% through July, Salt Lake County up 8%
Source: Univ. of Utah, BEBR
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Auto Sales Highest in 4 Years
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Last three months up 7.3% Fiscal year-to-date up 7.5%
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Utah 2nd Quarter 2012 Taxable Sales
Sales in Million $ % Change from 2011
Retail – Motor Vehicles
$ 1,180 13.3 %
Wholesale - durable goods
1,060 26.6
Services – Accommodations & Food
1,171 6.2
Retail – General merchandise
1,414 4.0
Retail – Food stores 899 6.8
Total Taxable Sales $12,068 8.0
Source: Utah State Tax Commission
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Seven month year-to-date 7.5%
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Fiscal Cliff and Europe Loom
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Revenue Overview
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Property Tax New Growth 2013
Or the lack thereof?
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2013 Property Tax Revenue Projections
• Projected new growth for 2013
– Reviewed permit authorized construction trends for residential and non-residential properties.
– Reviewed personal property (business equipment) taxable values with the Assessor’s staff.
– Projection vetted with Revenue Committee
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Countywide Real Property Growth2013 Projected
2012 2011 2010 2009
New Growth - Real Property ($000) 486,085
519,399
357,821
727,244
686,579
Permit Values ($000)
Total New Residential Construction Value
474,502
467,192
489,764
655,552
594,237
Hypothetical Taxable Value
55% of Residential Value 260,976
256,956
269,370
360,554
326,830
Total Nonresidential Construction Value
501,675
616,176
254,691
785,731
777,523
Taxable Value based on Permits 762,651
873,132
524,061
1,146,285
1,104,353
New Growth / Permit Value 63.7% 59.5% 68.3% 63.4% 62.2%
• Permit values have an apparent relationship to real property growth
• August 2011 to July 2012 less than prior year• Suggests slightly less growth than last year
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Personal Property• Depreciates rather than appreciates
– Requires new investment by businesses just to stay even
• Was negative countywide in 2011 and 2012 rate setting process (2010 and 2011 values)
• New growth for rate setting based on prior year values– Reasonably good data available for predicting its effect in 2013 rate
setting
Countywide Library Municipal Svc
2011 4,665,453,468 2,732,788,609 284,393,955
2012 4,770,379,113 2,860,858,984 279,190,813
Growth 104,925,645 128,070,375 (5,203,142)
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Centrally-Assessed Property
• A wildcard
• Mining the largest component– Somewhat driven by metals prices, but . . .– Higher metals prices in 2011 did not result in
higher value– 2013 metal prices mixed
• Other components – railroads, airlines, utilities, other
Metal Price % Change
Copper 8%
Gold 10%
Molybdenum -16%
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RDA / CDRA
• Tax increment financing (TIF) by definition captures new growth and diverts it from the normal taxing entities
• TIF capture offset new growth by $366.4 million in 2012
• City Creek is in a redevelopment project area– Additional RDA capture highly likely
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New Growth 2012
Real Property New Growth $519 Million
Personal Property ($156 Million)
CentrallyAssessed($188 Million)
Negative New Growth ($191 Mil-lion)
CDRA / RDA($366 Million)
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2013 New Growth
• Positives– Some real property new growth– Some personal property new growth
• Unknown– Centrally assessed
• Likely offsets– CDRA / RDA
• Conclusion– Reasonable probability that modest new growth
will be offset again, as it has been the last 2 years – “net zero”
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Property Tax Revenue Projections
Fund 2011 Actual
2012 Budget
2013 Projected
General $100,013,032
$102,484,267 $102,484,000
Flood Control $4,566,039 $4,618,118 $4,618,000
Health $8,678,431 $5,630,308 $5,630,000
Governmental Immunity $1,436,435 $1,455,024 $1,455,000
Bond Debt Service $39,727,999 $40,550,873 $40,551,000
Capital Improvements $978,605 $1,961,119 $1,961,000
Planetarium $2,609,971 $2,530,476 $2,530,000
Total- Countywide Funds
$158,010,512
$159,230,185
$159,229,000
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Property Tax Revenue Projections
Fund 2011 Actual
2012 Budget
2013 Projected
Municipal Services $9,438,814 $0 $0
Muni. Svcs. Tort Liability Levy $818,387 $813,409 $813,000
Library $28,112,399 $28,013,208 $28,013,000
State Tax Admin $18,698,078 $17,460,283 $18,093,000
Total-Property Tax Revenue
$215,078,191
$205,517,085
$206,148,000
![Page 29: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/29.jpg)
Inflation Effect on Countywide Property Tax Revenues
2001 2012$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$100,057,854
$74,279,069
PROPERTY TAX REVENUES (INFLATION-ADJUSTED)2001 BASE YEAR
(INFLATION INDEX: BLS WEST URBAN CONSUMER PRICE INDEX - ALL URBAN CONSUMERS)
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Sales and Use Tax2013 Projected Tax Revenues
$23,500,000
$50,300,000
$13,300,000
$1,800,000
$11,000,000
$18,000,000
$19,900,000
Local OptionCounty OptionTransientTransient-SuppCar RentalRestaurantZAP
$137,800,000 Total Projected Sales and Use Tax Revenue
![Page 31: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/31.jpg)
Tax Year to
Date 2012
Year to Date
Projection (June 2012)
Difference Difference %
Local Option$12,504,49
3$11,873,877 $630,616 5.3%
County Option$26,792,37
4$26,694,409 $97,965 0.4%
Transient Room $7,706,471 $7,999,745 ($293,274) -3.7%
Trans. Room Supp.
$1,066,639 $1,107,227 ($40,588) -3.7%
Car Rental $6,400,304 $6,328,410 $71,894 1.1%
Restaurant $9,991,167 $10,122,781 ($131,614) -1.3%
ZAP$10,583,10
6$10,543,282 $39,824 0.4%
TOTAL$75,044,5
55$74,669,731 $374,824 0.5%
Actual Sales Tax Receipts vs. Projected Year to Date through July 2012
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Tax Year to
Date 2012
Year to Date 2011
Difference Difference %
Local Option $12,504,493 $10,919,195 $1,585,298 14.5%
County Option $26,792,374 $24,928,184 $1,864,189 7.5%
Transient Room $7,706,471 $7,228,776 $477,695 6.6%
Trans. Room Supp.
$1,066,639 $1,000,512 $66,127 6.6%
Car Rental $6,400,304 $6,407,598 ($7,294) -0.1%
Restaurant $9,991,167 $9,555,691 $435,476 4.6%
ZAP $10,583,106 $9,803,126 $779,980 8.0%
TOTAL$75,044,55
5$69,843,083 $5,201,472 7.4%
Sales Tax Receipts vs. Same Period Prior YearYear to Date through July 2012
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Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 34: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/34.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000
$23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 35: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/35.jpg)
Local Option Sales Tax
![Page 36: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/36.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000
$50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 37: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/37.jpg)
County Option Sales Tax
![Page 38: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/38.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000
$13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
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Transient Room Tax
![Page 40: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/40.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000
$11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 41: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/41.jpg)
Car Rental Tax
![Page 42: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/42.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000
$18,000,000 4.3%
ZAP $18,500,000 $18,800,000 $19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 43: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/43.jpg)
Restaurant Sales Tax
![Page 44: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/44.jpg)
Sales Tax Projections
Sales Tax 2012 June Budget
2012 Updated
Projection
2013 Projection
% Chang
e
Local Option $21,500,000 $22,200,000 $23,500,000 5.9%
County Option $47,000,000 $47,700,000 $50,300,000 5.4%
Transient Room $13,200,000 $12,800,000 $13,300,000 4.0%
Transient Room Supp. $1,800,000 $1,750,000 $1,800,000 4.0%
Car Rental $10,500,000 $10,500,000 $11,000,000 4.5%
Restaurant $17,000,000 $17,300,000 $18,000,000 4.3%
ZAP $18,500,000 $18,800,000
$19,900,000 5.8%
TOTAL $129,500,000
$130,400,000
$137,800,000 5.7%
![Page 45: 2013 Economic Outlook, Revenue Overview, & Budget Issues Prepared for the Salt Lake County Council and Mayor Darrin Casper Doug Macdonald Lance Brown](https://reader038.vdocument.in/reader038/viewer/2022110116/5518aab9550346991f8b4c66/html5/thumbnails/45.jpg)
Zoo, Arts, & Parks Tax
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Budget Issues
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Mayor Peter Corroon
2013 Budget BriefingBy Darrin Casper
October 16, 2012
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2013 Budget Direction
• Elected Officials and Department Directors were asked to illustrate impacts of a 10% cut to County funding
• Show/request pent up demand (ex. Government Center rent)
• Capital project funding at or above industry standard by fund
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Where We’ve Been…2009 Interim Budget Measures: 1st Step
• Implemented Hiring Freezes:• Phase I Nov 2008• Phase II Apr 2009
• Provided Early Retirement from December 2008 – February 2009
• Suspension of 401k payments in April 2009
• Goal was to “buy” time, to allow a gradual reduction in expenditures without a material RIF
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2010 Budget Measures: Second Step
• Additional county funding program cuts of $18.4 million in the General Fund
• 401k suspension carried forward
• 69 FTEs eliminated from budget
• 2.75% negative structural adjustment to employee pay
• Tax rate shifts, program revenue increase
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2010 Early Retirement
• November 16, 2009 – March 31, 2010– Cash out accrued sick leave at 75% as cash, 401k, or 457k
• Provide $5,000 per year worked in excess of 30 years, not to exceed $25,000
• Reduction Goals– Rating Agencies
• 50 FTEs• $3,250,000
– Mayor/Council• 62 FTEs• $4,000,000
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2012 Budget Measures: Third Step
• Additional county funding program cuts of $6.5 million in the General & Related Fund’s
• 32 FTEs eliminated from budget
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Reductions SummaryMeasures Taken Since 2009
• 3 Hiring Freezes & 2 Early Retirements232 FTE’s
• Early Retirement Payback$4,000,000
• Pay and 401K Cuts$8,081,420
• 2009 mid-year budget resolution $12,617,041
• Additional budget cuts over past 4 years$24,875,184
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Salt Lake County Employment PictureFTE Reductions
Year Budgeted FTEs
2008 4,200
2009 4,099
2010 3,572*
2011 3,632
2012 3,626
*Transferred 441 FTEs to UPD in 2010
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Proposed Hiring Freeze
• Cap total FTE count in County at 3,566
• Sets number to include existing vacancies after those approved by Council
• Additional turnover would enable hiring, but only after vacancies are reviewed for priority, and as long as they do not exceed the FTE cap
• Effective immediately through budget process
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Inflation Impact
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
200
300
400
500
Selected Consumer Price Index (CPI) Trends
All Items (29%) Energy (81%)Medical Care (53%)
CP
I In
dex V
alu
e
Source: U.S. Dept. of Labor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers (CPI-U), U.S. City Average
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Inflation is Real
2001 2012
Big Mac $2.79 $3.69
Gallon of gasoline $1.52 $3.79
Average County salary $37,896 $46,982
Health Insurance/employee(*) $4,312 $9,237
Retirement/employee $4,843 $7,397
*Health Insurance spending by Salt Lake County increased from $16.3 million in 2001 to $30.3 million in 2011.
*The number of enrollees has decreased from 3,788 to 3,279 over the same period.
*Sales tax revenue over this same period grew from $35.3 million to $44.5 million, or $9.2 million total.
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The Demand for Service
• Most County programs have an inelastic demand for service. The demand is unaffected by a downturn in the economy.
• Many programs have seen significant increases in the demand for service– Visitation at Parks and Recreation facilities has increased by 640,000
annual visits since 2008– Human Resource job applications have gone from 13,152 in 2008 to
22,636 projected in 2012– Social Service referrals up 12% since 2008– Library circulation has gone for 14.2 million to 15.7 million (e-
collection up 876%)– Meals on Wheels have gone up 5% since 2008– County population has grown 14.7% since 2001
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The County has Expanded to Meet Demand
Program Program Program Program
Libraries: Senior Centers: Recreation Centers: Oxbow Jail
Magna Riversbend Northwest Rec Center
Herriman Magna JL Sorensen Rec Center
East Millcreek Riverton Millcreek Comm. Center
West Jordan East Millcreek
Draper
119 TOTAL FTE’S ADDED
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2013 Budget Challenges
• New Requests:– General Fund
• 46 FTE’s• $10,500,000
– Total County• 74 FTE’s• $29,300,000
• Inflation:– Health Insurance– Retirement– Pay Restoration– 401 Restoration
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2013 Budget ChallengesDeferred Maintenance
• Best Practice – put aside $3 per square foot per year
• The goal will be a fund by fund solution to all deferred maintenance issues identified by Facilities Management.
• Solution will enable County to catch up and stay on top of all maintenance needs.
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2013 Budget ChallengesDeferred Maintenance
Facilities Square FootageRecommend
Funding
County-Wide:
General Fund 1,503,984
Health 125,593
Planetarium 54,200
Government Center 720,771
2,404,548 $7,213,644
TRCC:
Parks and Rec. 1,066,907
Salt Palace 1,034,800
South Towne 250,000
Center for the Arts 263,604
2,615,311 $7,845,933
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2013 Budget ChallengesDeferred Maintenance
Facilities Square Footage Recommend Funding
Library 338,414 $1,015,242
Golf Courses 59,256 $177,768
Solid Waste 8,370 $25,110
Municipal Services 17,900 $53,700
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2013 Budget ChallengesOPEB
• OPEB– Fund Annual Retired Contribution - $2.9
million– Will lower OPEB liability– Smart Management
• Consider measures to turn benefits for future employees to defined contribution as opposed to defined benefit
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Work-in-Progress
• Currently getting all numbers in BRASS
• Reviewing requests and possibly additional cuts
• Balanced budget will be proposed November 8th