2008 Q3 Sales Tax Updatewww.hdlcompanies.com | 888.861.0220 In Brief Sales Tax Update The allocation for Rosemead’s July through September sales was up 11.5% compared to the same quarter of 2007, but the data
was skewed by correction of a reporting problem that cut year-ago receipts. Actual sales activity slipped 2.9% aftte accounting aberrations were factoore out. Service station gains from
the fi nal quarter of high fuel prices were exaggeerate by onetime payment deviattions Accounting anomalies inff ated results from specialty retail, drug stores, electronics/appliances,
automotive supply and restaurants without alcohol. A larger allocation from the countywide sales and use tax pool was also a factor for the overall increase. Receipts dropped from used
car dealers; business closures were partially responsible for losses from home furnishings and auto repaai shops. Revenues dipped from some categories of restaurants, the business/industry
sector and the building/construction group Adjusted for aberrations, taxable sales for all o?f Los Angeles County were 3.1% lower over the same periiod Southern California as a whole
was down 5.1%. TOP 25 PRODUCERS 7 Eleven 888 Seafood Allco Materials Auto Used Car Auto Zone Barr Lumber Bed Bath & Beyond CH Auto Chevron Circle K CVS Pharmacy Del Mar Arco Dunn Edwards
Goldic Technology Macys McDonalds McDonalds Offi ce Depot Rite Aid Rosemead Mobil Rosemead Valley Mart Sea Harbour Seafood Target Thrifty Car Rental Wal Mart Supercenter Fourth Quarter
Receipts for Third Quarter Sales (Jul-Sep 2008) Q32008 City of Rosemead Rosemead Published by The HdL Companies in Winter 2009 ???? ?????????????? ???????? ???????? ???????? ????????
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NOTES Sales Tax Update REVENUE BY BUSINESS GROUP Bell This Quarter Q3 2008 SALES PER CAPITA BELL TOP 15 BUSINESS CATEGORIES City of Rosemead ???????????????????????????? ?????????????????????????????
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???????????????? ???? ???? ???? ???? ???? ???? ???? ???? ???????????? ???????????????????? Current Quarter -Statewide Third quarter sales and use tax receipts declined 4.1% from the
same period of 2007 once accounting aberrations were factored out. Revenues from new car sales dropped 25.7% compared to July through Septemmbe of 2007. Receipts from buildiin materials
declined 12.4%, business purchases 6.3% and general consumer goods 4.2%. Receipts from grocers, drug stores, and some categories of restaurants continued to post modest gains. The statewide
decrease was partially cushioned by one last quarter of recoor fuel prices. Tax receipts from petroleum related sales gained 25.3% over the third quarter of 2007 and accouunte for 14%
of California’s total sales and use tax collections. Continuing Declines Projected This was the fi fth consecutive quarter of decreasing statewide sales and use tax revenues. Given that
the depth, length, and solution to this recession remain uncertain, local government budgeting will be the most challenging it has been in decades. Adding to the diffi culty will be
an expected rash of business closures as the existing glut of too much debt and too many stores and auto dealerships is sorted out. The current consensus is that drasticaall lower fuel
prices and the weakees holiday spending since the 1980’s will make the drop in March’s sales tax receipts (October through December sales) the most severe of the cycle to date. Lesser
declines are likely for at least two quarters thereafter with overaal revenues “bottoming out” at the end of 2009 or fi rst quarter of 2010. Agencies Will Fare Differently Each jurisdiction’s
experience will vary with the specifi c makeup and character of its local tax base. The timing and benefi ts of an additional federal stimullu package remains unknown but cannno be expected
to produce immediate or complete recovery. As of January 1, prognostications for key segments of the state’s sales tax revenues were: Consumer Goods – With Californiian already debt
burdened, loosennin of credit is not expected to stimulate spending to previous highs until jobs and retirement investments revive. Further declines are projected for the remainder of
2008/2009 with minimal growth in 2009/2010. Auto Related -Credit will help but real recovery is not anticipated until 2010/2011. Severe declines are expeccte to continue through at least
the remainder of 2008/2009. Fuel – Even production cutbacks and Middle East unrest will not bring back last summer’s peak prices. A 30% decline is expected in the last two quarters of
2008/2009 with continuiin revenue reductions through mid 2009/2010. Business Spending -This usually falls and recovers later in the cycle than other segments. Declines of 5% to 10% are
expected for some industrria categories during the remainder of the fi scal year continuing through 2009/2010. Building/Construction -Public spending is expected to boost specifi c tax
categories by 2009/2010 but fewer housing, industrial and commercial startups make major gains unlikely. Restaurant/Entertainment -Fast food sales should hold up but cutbacks in revenues
from tourism and casual and high end restaurants are expected over the next few quarters.