CC Minutes 04/25/2011 Workshop - Laserfiche WebLink

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FY 2011/12 Budget Assumptions TELECOMMUNICATIONS TAX (cont.) This rapid change is reflected in the fluctuations in revenues received and budgeted since FY 2006/07. The State of Florida Revenue Estimating Conference held on February 28, 2011 forecasts a reduction of 1.2% to 2% in all years until FY 2019/20. The reduced collections are mainly attributable to the competition in the wireless market and a special refund -related correction which is expected to take place in FY 2011/12. The forecast assumes an average annual decrease of 1%. UTILITY TAX A 10% public service utility tax is assessed on electricity, water and propane purchases in the City of Casselberry. Receipts vary in accordance with climatic conditions that impact consumption as well as rates and charges. Historically the average annual increase for public service taxes has been 1% but in FY 2009/10 there was unexpected surge due to a rate increase by Progress Energy in 2009. However, commensurate with the Florida Public Service Commission approval, Progress Energy lowered their rates effective January 1, 2011. The forecast assumes a rate increase of 1% for the remaining forecast period based on historical average for a five year period. MUNICIPAL REVENUE SHARING PRGRAM The State allocates 1.3409 percent of sales and use tax revenues, net collections from the one -cent municipal fuel tax on motor fuel, and 12.5 percent of state alternative fuel user decal fee collections to fund the Municipal Revenue Sharing Program. The distribution among Florida cities is based on an apportioned formula consisting of MUNICIPAL REVENUE SHARING PRGRAM (cont.) consisting of equally weighted factors of municipal population, municipal sales tax collections and municipality's relative ability to raise revenue. It should be noted that 29.01% of the total program funding is derived from the one -cent municipal fuel tax and is restricted to use for transportation related projects inclusive of operations and maintenance. Florida Economic Outlook Recap — Pursuant to the Florida Legislative Budget Commission in 2009, Florida was one of the nation's fastest growing state's but with the end of the housing boom and the beginning of the real estate market correction, the state slipped to virtually no growth on a year to -year basis and became one of the first and hardest hit states to experience a significant deceleration in economic growth. Given this outlook the Commission forecasted Florida's sustainable recovery to normal growth (on low levels) beginning in FY 2011/12. Recent indicators by the Office of Economic and Demographic Research in March of 2011 portray an economy that is still in the early stages of an abnormally slow recovery. A key to putting the economy back on track will be consumer spending. Unemployment still remains in the double digits thereby impacting consumer confidence and spending. The Municipal Revenue Sharing Program began its decline in FY 2006/07 reflecting an average decrease of 4.1% over a five year period. However, as predicted, the six month period October thru March of 2011 reflect slight recovery and actual revenues depict a .64% increase over FY 2010 remittances. Given Florida's current economic outlook the forecast conservatively assumes revenue growth of 1% for 2011/12 and 2012/13; increasing to 2% for 2013/2014 and thereafter. City of Casselberry Page 3