Burlingame hotel, sales taxes falling: Operating budget stable despite biggest revenue producers slightly lower

Although Burlingame brought in more than a million more in funding than expected — due in part to charges for city services — two of its most major revenue sources, hotel tax and sales tax, did not meet originally projected expectations. 

The city made $21.8 million in hotel tax; a million less than predicted, and $16.6 million in sales and use taxes, which was $406,000 less than predicted. 

Mayor Michael Brownrigg stressed, however, that though Burlingame may have been overzealous in its original predictions, revenue is largely holding steady or increasing from prior years. 

“Each of our revenue lines are either flat or growing over the last half-dozen years. We continue to have a strong economy, a strong base,” he said at the city’s meeting March 11. “We were a little ambitious or optimistic, maybe, on a couple of these line items — there is still a strong engine underneath us.”

Brownrigg added that it may be prudent for the city to discuss how much it’s charging local businesses in fees, however. 

“I know we try to price to do cost recovery, but we also have some optionality. I want to be careful we don’t price out our small businesses,” he said. 

The city’s most significant source of revenue, its property taxes, is holding strong at an expected $36 million for the 2025-26 fiscal year. 

Because of a planned $10.1 million transfer to the capital project fund for city maintenance of facilities and parks, as well as a $3.1 transfer to its debt services fund, Burlingame’s budget technically sits at a net deficit of $6.3 million. This is because the city pulls from its savings on these line items, Councilmember Donna Colson said, stressing the operating budget remains in good health. 

“Our revenue exceeds our baseline expenditures. We are operating our budget in the black,” she said. 

Burlingame’s reserves also remain in good health, with $22.5 million in economic stability reserves, $2 million in catastrophic reserves, $22.3 million in a pension trust fund and an unassigned fund balance of $3.9 million. 

Councilmembers discussed the possibility of holding less money in the city’s economic stability reserve and looking at other, similar-sized cities as a metric. 

“I just wonder if we need an economic stability reserve that’s this robust if we didn’t draw from it at all during COVID, when we lost $50 million to $60 million over three years,” Brownrigg said.