The opening of Great Wolf couldn’t be coming at a better time for Manteca.
Financial experts schooled extensively in municipal revenue trends hired by the city to generate revenue projections for the upcoming fiscal year starting July 1 have projected Manteca’s transit occupancy tax receipts will grow by $1.2 million instead of dropping by $700,000 based on COVID-19 pandemic impacts.
Without Great Wolf opening Sept. 1, it would have meant that the projected $2.2 million revenue shortfall in next year’s budget would have been nearly doubled to $4.2 million. The $2.2 million to cover the projected gap between revenue and expenditures is coming from the city’s $13 million fiscal stability reserves. The city has an amount equal to 70 percent — or $30 million — of its current $47 million general fund set aside in reserve.
Even with hotel room occupancy that plunged to nearly 28 percent in April at existing Manteca hotels that collectively have nearly 500 rooms, room taxes will lead next year’s budget in terms of growing revenue.
Property taxes will still be the No. 1 source of revenue for next year’s provisional budget expected to hit $50 million. Based on the sale price of property that has exchanged hands, new construction, and Proposition 13 adjustments Manteca will collect an additional $740,561 in property tax next fiscal year to bring the total to $17.2 million.
Analysts from HDL told the City Council Tuesday night in projecting the hotel tax receipts they took into account the current impact of COVID-19 on travel, the fact soccer tournaments and Big League Dreams tournaments — a big source of room bookings — won’t return until the end of the year, and that there is expected to be a second wave in coronavirus cases between October and December mirroring the flu season. The second wave is expected to be less damaging on room bookings compared to what happened in March, April, and May.
Voter approval in 2018 of a measure that took the room tax from 9 percent to 12 percent also helped.
When everything settles on June 30, 2021 the analysts expect room taxes even after accounting for COVID-19 hits will be $2.6 million for the fiscal year. As travel and bookings at hotels including Great Wolf going forward get out from under pandemic impacts, room tax will prove to be an effective antidote for the biggest hole in city revenue — sales tax.
Sales tax is expected to drop $263,120 next year as businesses in Manteca take a $26.3 million hit.
The analysts do not expect the city’s sales tax to fully recover from the carnage caused by the coronavirus even within five years. That’s due to the loss of brick and mortar businesses and the shift to online shopping that accelerated with the pandemic.
As things stand the city will only have to eat into $2.2 million of its general fund reserves to balance next year’s budget. That is after accounting for an expenditure of up to $1 million approved by the council Tuesday to encourage early municipal worker retirement that would reduce expenses going forward.
To contact Dennis Wyatt, email firstname.lastname@example.org