Visalia revenue booms despite sales slowdown

(Rigo Moran)

Fiscal report for 2022-23 indicates city continues to grow amid booming revenue, long-term financial planning despite slowdown in consumer spending, travel

VISALIA – According to the latest fiscal report covering the period up to June 2023, Visalia’s economy is thriving with record-breaking success, indicating continued growth and a stable economy in the region.

The extensive fiscal audit examines every aspect of revenues and expenses for the city, and its key takeaways include a general fund surplus, which has grown in each of the last 10 years. The surplus hit $16 million for fiscal year 2022/2023, an increase of $3.3 million over the previous fiscal year.

The increase comes despite lower sales tax revenue than what was reported in previous years. Sales tax saw just a 2% increase after experiencing a significant spike during the pandemic that is attributed to high inflation throughout much of the period. The slight increase was in line with projections from the previous year, as reported by The Sun-Gazette.

As noted in the report, Visalia saw an increase of 173 registered businesses, bringing the total number of businesses to 13,126. That number is expected to continue growing in the coming fiscal cycle as the city invests in development projects on Main Street, Mooney Boulevard and projects on the east side of the city that will attract new investments.

As the economy continues to grow, Visalia is attracting new businesses such as Tractor Supply, Sprouts, Nordstrom Rack and Barnes & Noble stores, all of which have recently opened. Another key area of growth the report highlights is the continued development of microbreweries in Visalia. Several locations on Main Street are expected to open this year.

shopping-center-sprouts-7-24-rm
(Rigo Moran)

Overall, Visalia’s fiscal year 2022-23 saw growth in all of its major revenue categories except for one, according to the report, although it stated the growth came in at lower levels than what the city has experienced over the last couple of years.

“Consumers continued to spend their disposable income on goods and services they wanted despite continued high inflation, however, spending is down, and credit card debt is rising, possibly affecting future revenue growth,” the report states.

The only revenue stream to see a decline was the Transient Occupancy Tax, often called the “Bed Tax.” This is a fee charged by hotels and is often borne by out-of-state travelers. The decrease over the prior year was just 1% and amounted to only $55,404.

The largest revenue increases came from franchise fees and business licenses, growing 17% and 13% respectively. Franchise fees are charged to corporations and amount to a minimum of $800 per Limited Liability Corporation.

Auditors notably pointed out that the emergency fund is now fully funded, a long-term goal that has required extensive efforts by the city council to achieve. The solid revenue stream also means that the investment in the Civic Center project is fully funded.

The report did point out some areas of concern. Notably, permits for housing construction have declined by nearly 50% over the previous fiscal year. Just 340 permits for single-family homes were issued between 2022 and 2023. Housing shortages cause higher housing costs, and rents, and reduce the ability of families to spend money on other goods and services.

Interest rate volatility could present issues in the near future, but the economy in Visalia is well-prepared to handle any possible recession that may come. The continued growth of the economy means the city will be able to continue many planned projects such as repairing streets, beautifying downtown and finalizing the Civic Center plan.

CORRECTION: This story was corrected to reflect a change in the general fund surplus of $16 million for the 2022/2023 fiscal year. Feb. 14 at 9:04 a.m. pst

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