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recommended that it be further reduced to $1.5 million. This would put the supplemental property tax revenue at the same level it was in 2001, after the last economic recession. Actual supplemental property tax received in the 2005-06 fiscal year was $2.4 million. The property tax in-lieu of VLF was established by the state after permanently reducing the VLF rate from 2% to 0.65% in 2004 as part of the triple-flip. This replaces the revenue loss due to the reduction in the VLF rate with property tax shifted from countywide ERAF and increases annually in proportion to the growth in assessed valuation of the jurisdiction. Property tax in-lieu of VLF for 2008-09 was originally projected to increase 6.5% over the original budget estimate. Because the growth in assessed valuation is expected to be lower the estimate is recommended to be reduced by $(57,894). Sales Tax – Proposition 57, the California Economic Recovery Bond Act enacted by voters in 2004, reallocated 25% of the 1% local sales tax and dedicated that portion as a source of repayment for the State deficit reduction bond repayment. As part of this action (the triple-flip), the State replaced the 25% portion of the reallocated sales tax with an amount of ERAF property tax based on a formula involving statewide sales tax growth and the change in county population. The adjusted estimate was based on updated figures provided by the State Controllers Office, and reflects a reduction of $(62,798) for the 25% portion. The recommendation regarding the remaining 75% local portion of the sales tax is to reduce the budget estimate by $(713,887). The 75% local portion of the sales tax was originally projected to increase 2.5% for 2008-09, roughly in line with the increase in inflation. However, the recommendation is now being revised to a 0.0% increase. This takes into account that 2007-08 sales tax receipts included 2 quarters of payments from auto dealers that relocated at the end of calendar 2007. Also, the recommended adjustment assumes a general decline of 3% to 5% in the auto & transportation and building & construction categories generally. Development Services Fees - Development Services fees are comprised of the various building permit fees (building, electrical, plumbing, HVAC), planning & zoning fees, plan check fees, and public works fees. The initial projection for building permit fees for 2007-08 was $2.2 million, but was revised downward to $1.5 million during the mid-year review. The original revenue projection for 2008-09 was $2.3 million and is recommended to be reduced to $1.6 million. Actual collections in 2006-07 were $1.9 million. The recommended adjustment to planning fees is primarily a reduction in the amount budgeted for contract planning services. Based on 2007-08 YTD experience it is recommended that planning fees be reduced from $444,241 to $152,385. è