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Sales Tax Sales tax is the second largest source of revenue for the City (after fees and charges), accounting for 31% of total City-wide revenue (excluding interfund transfers). General Fund sales tax revenue accounts for 45% of total General Fund revenue. Over the past few years, sales tax revenue declined due to increased retail competition in neighboring municipalities. The recent recession worsened this trend and sales tax revenue for 2009 declined by 7% compared with 2008. Total sales tax revenue for 2010 is budgeted at $9.0 million, which is 2% lower than the projections for 2009. Sales tax revenue is projected to decline by another 1.0% in 2011, before gradually increasing in 2013. The City has taken past declines in sales tax revenue seriously and initiated various programs to address this issue. In 2006 the City established an Urban Renewal District and adopted an Urban Renewal Plan. The City has also developed a Business Assistance Program with the intent of stabilizing the current sales tax base and expanding that base for the future. The City’s current sales tax rate is 3.5%. The City currently allocates 1% to the Capital Projects Fund and 2% to the General Fund. This allocation meets the requirement set by the voters that a minimum of 33% of the 3% sales tax be allocated for capital projects. The Conservation Trust – Land Acquisition Fund receives 0.375% of the sales tax and is used for open space land purchases, open space management and maintenance activities. The Historic Preservation Fund receives the remaining 0.125% sales tax and those revenues are dedicated to specified historic preservation purposes approved by the voters in November 2008. Those purposes include: 1. Providing incentives to preserve historic resources, 2. Providing incentives to preserve buildings that contribute to the historic character of historic Old Town Louisville; 3. Providing incentives to limit the mass, scale, and number of stories of new buildings and developments within historic Old Town Louisville; to preserve setbacks; to preserve pedestrian walkways between buildings; and to utilize materials typical of historic buildings, above mandatory requirements; and 4. City staff time to administer these programs. ïï