FREMONT, CA – AUGUST 15: The Fremont City Hall sign is photographed in Fremont, Calif., on Saturday, August 15, 2020. The miscalculations began in 2022, when Fremont started receiving unusually high quarterly sales tax allocations from a California tax agency.
At the time, Fremont didn’t know how much exactly the city would owe. Just last month, the final number finally came down from the state: $20 million over the next two years, a significant amount for a city with an approximately $300 million annual budget. Beyond the immediate burden of repayment to the state, the city also has to grapple with faltering revenue projections. The city is now projecting as much as a $50 million decrease in sales tax revenue this year, and an ongoing $34 million dip in coming years.
In an earlier statement, the California Department of Tax and Fee Administration said it does not disclose information on specific taxpayers due to confidentiality laws. A spokesperson did, however, acknowledge that it was the department’s responsibility to “ensure that the local tax is allocated to the proper jurisdictions”.California schools gained billions during COVID-19 pandemic.
Regardless who is to blame, community members such as Abreu worry that the city is papering over key budget issues that could arise down the road. But at least the outcome of the sales tax error is proof that Fremont’s financial future is in good hands, according to city officials.