When considering a matter such as Measure DB, it's helpful to understand how the City receives revenue to fund fiscal year 2020-21 General Fund appropriations of $25,811,158. Almost 65% of General Fund revenues come from just three sources:In 2004, the state legislature permanently reduced vehicle license fee rates from 2 percent to 0.65 percent, dramatically cutting a longstanding local government revenue source. To compensate, the state provides a dollar-for dollar match to the City from state property revenues. These revenues now present the City’s single-largest General Fund revenue source. Even so, these revenues are not enough to cover annual public safety costs, which now exceed $8 million.
Property Tax in Lieu of Vehicle License Fees (25.8% of General Fund
Property Taxes (22.1% of General Fund Revenues)Property tax is assessed on real property (usually land and buildings) and moveable property like boats, aircraft, and business equipment. Diamond Bar receives only five cents of every dollar of property tax generated locally, a rate established at incorporation that is unlikely to change. That means that 95% of all local property tax dollars go to the state and county.
Sales & Use Taxes (16.6% of General Fund Revenues)
Sales and use taxes are applied to most retail purchases, with a few exceptions. Currently, the local sales and use tax rate is 9.5%. Diamond Bar receives one cent of the 9.5 cents generated on each dollar of sales and use tax. A recent study estimated that about 40 percent of Diamond Bar’s sales tax revenues come from visitors making purchases in town.
With the City largely built-out, significant new developments are unlikely. This means that the City’s property tax revenues are essentially bound by annual Consumer Price Index adjustments. The same goes for adjustments to the City’s Property Tax in Lieu of Vehicle License Fee revenue share. Measure DB, on the other hand, is an option to increase local revenues outside the confines established by the state or county.