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Property TaxProperty Tax <br />Property tax revenues, which include secured, unsecured, supplemental, delinquent <br />property taxes, homeowners tax exempt, and the amount reimbursed by the State in <br />exchange for the reduction in vehicle license fees, are the City’s largest revenue source and <br />are projected to increase by 4.1 percent in FY 2025/26 and by 3.8 percent in FY 2026/27. <br />Table 3: Property Tax by CategoryTable 3: Property Tax by Category <br />Sales TaxSales Tax <br />Sales tax is expected to increase by 4.1 percent in FY 2025/26 and 2.8 percent in FY 2026/27. <br />The increase is largely due to anticipated additional sales tax revenues from the new Costco <br />store, which opened in November 2024. However, based on the sharing agreement with <br />Costco, 40.0 percent of the sales tax revenue will be paid back to Costco for costs associated <br />with traf{c and street improvements in the Johnson Drive Economic Development Zone <br />until the City’s share of the cost is paid off. <br />The budget re|ects the full year of revenue from Costco starting in FY 2025/26. Sales tax <br />revenues are projected at $26.0 million in FY 2025/26 and $26.7 million in FY 2026/27, <br />increasing from $24.9 million in FY 2024/25. Sales tax is the City’s second largest revenue <br />source. <br />Table 4: Sales Tax RevenueTable 4: Sales Tax Revenue <br />30 Page 311 of 682