The City of Folsom is committed to keeping our community informed about the city's financial challenges and answering community questions about the budget.

Question: What are the impacts of the current slowed sales tax growth?

Answer: Sales tax revenue—one of the city's primary revenue sources—no longer covers the cost of providing services or maintaining the city's aging infrastructure.

Sales tax is a critical revenue source for the city, but its growth rate has slowed in part due to changing consumer behavior and the impacts of online shopping. 

The city's sales tax growth rate averaged approximately 6% annually from Fiscal Year 2010 through Fiscal Year 2018. However, since then, it has decelerated significantly to a more modest growth rate of around 2.3% per year.

The slowed sales tax growth and rising costs create a structural deficit, making it fiscally unsustainable to maintain current services beyond Fiscal Year 2024-25 without additional revenue.

See answers to other frequently asked questions.