Truckee moves into Stage 2, economic impacts still uncertain

With Truckee and North Tahoe moving into Stage 2 of reopening, many of the lingering short- and long-term effects relating to COVID-19 are still being analyzed.

The town expects to take a hit in revenue this fiscal year due to third and fourth quarter losses from two of its three largest sources, which have been immediately impacted by the outbreak of the coronavirus.

Transient occupancy tax and sales tax account for roughly $9 million annually for the town, but due to stay-at-home orders and non-essential businesses being closed, town staff is anticipating a loss of roughly $2 million in revenue, which is about 10% of Truckee’s budget.

Truckee, according to Administrative Services Director Kim Szczurek, is estimating a loss in sales tax revenue to be around $1 million. Sales tax is the town’s second largest general fund source.

On Tuesday, Nevada County’s readiness plan was approved by the state, allowing areas to move further into Stage 2 of reopening.

“We are fortunate that we met the criteria to advance through Stage 2 and can now allow for certain businesses to open sooner than they would if they had to move at the pace of the state as a whole, but this should not be viewed as an indication that we are now risk free,” said Jill Blake, county public health director, in a news release. “In fact, there is a greater responsibility on businesses and customers to work to reduce the risk of disease transmission as we reopen Stage 2 businesses in Nevada County.”

All Stage 2 businesses — including retail, office work spaces, outdoor museums, dog grooming and landscaping — can reopen with COVID-19 prevention plans in place.

Helping businesses and short-term revenue

In an effort to provide financial support, businesses that filed a return of less than $1 million were allotted an additional three months to file, according to the California Department of Tax and Fee Administration.

Small businesses can also take advantage of a 12-month, interest-free payment plan for up to $50,000 of sales and use tax liability. Though the extension and payment plans will allow businesses to keep more cash on hand, it also means Truckee won’t see that revenue in the short term.

Szczurek estimated the short-term impact on revenues of allowing businesses to keep cash on hand will be somewhere in the $750,000 range.

“Not only is the town going to see a finite shrinkage because of fewer sales, but we’ll also see shrinkage in helping the local businesses by allowing them to hang onto the cash for a longer period,” she said during the April 14 Town Council meeting.

Transient occupancy tax is the town’s third largest source of funding, and in recent years has had a noticeable increase in revenues. Due to short-term rentals being shut down, the town is expecting a loss of around $1 million in revenue from transient occupancy tax.

Qualified lodging entities in Truckee may also apply for relief through the Truckee Lodging COVID-19 Disaster Recovery & Awareness Campaign. The Truckee Tourism Business Improvement District determined that lodging entities which filed an on time May 1 return for transient occupancy tax are eligible to receive up to 60% of their total payment for the reporting period of January through March.

“At this point (the Truckee Tourism Business Improvement District has) utilized approximately $400,000 of their reserve funds that have gone back to all payees,” said Truckee Mayor Dave Polivy during Tuesday’s Town Council meeting. “That’s a big funding piece that they were able to accomplish.”

At its Tuesday meeting, the Truckee Town Council also approved a contract amendment in the amount of $24,950 with Terris Barnes Walters Boigon Health, Inc. to perform additional polling regarding a transient occupancy tax ballot measure. Polling will inform the Town Council on the ballot measure, which would be a 2% transient occupancy tax increase in order to support workforce and affordable housing.

Polling on the November ballot measure will be conducted in the coming weeks in order to support a council decision in June.

A decade later, growing budgets and expenditures

More than a decade ago, Truckee was fighting through the end of the Great Recession.

In 2008-09 the town had $20.11 million in its general fund budget, compared to $17.42 million in general fund expenditures. A decade later, Truckee had a general fund budget of $27.74 million, compared to $25.58 million in general fund expenditures.

In 2008-09 the town had $2.83 million in sales tax and $1.33 million in transient occupancy tax. In 2018-19, it reported $4.6 million in sales tax and $4.26 million in transient occupancy taxes.

Impacts on the town’s 2019-20 budget have yet to be completely quantified, as the town’s fiscal year ends June 30.

Eye on summer

In the coming weeks town staff will begin working on a short-term budget for the summer months, which is typically adopted by the council in June.

Town staff indicated that Truckee will be conservative moving forward with an eye toward completing or approving current projects. Truckee likely won’t commit to any new initiatives or programs in the short term, along with restricting employee travel and non-essential spending.

“We’re asking to modify our budget process, really moderate any expenditures that aren’t absolutely necessary, not add big capital projects that don’t either have completely outside funding or there’s some critical need, (and) finish out the projects that we’re working on now,” said Szczurek during the April 14 Town Council meeting.


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Justin Scacco is a reporter for the Sierra Sun. Contact him at or 530-550-2643.

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