Property Tax Highlights

Transcription

1 Property Tax Process Property Tax Highlights County of San Mateo Fiscal Year July 1, 2006 to June 30, 2007 Today, California schools, counties, cities and special districts depend on property tax as a primary source of revenue. Property tax raised $1.14 billion for local governments within the boundaries of San Mateo County during fiscal year and is expected to generate $1.24 billion for fiscal year The Property Tax Highlights is intended to provide an overview of the property tax process in San Mateo County. It includes highlights of current results and a broad description of how the property tax is generated from the taxpayers and distributed to local government agencies. Please visit our website located at to view or download copies of the Property Tax Highlights and other publications. Controller The Proposition 13 property tax initiative approved overwhelmingly by California voters in 1978 is the basis for the current tax process. Proposition 13 limits the property tax rate to 1% of assessed value, plus the rate necessary to fund local voter-approved bonds. It limits assessed value increases to 2% per year on properties not involved in a change of ownership or properties that did not undergo new construction. Newly acquired property is assessed at its new market value (usually the purchase price) and the value of any new construction is added to the existing base value of a parcel. Since the passage of Proposition 13, the California legislature and the voters have continually altered, interpreted, and implemented changes in the property tax laws. This publication helps to explain some of the complexities of Proposition 13 and subsequent statutes that govern the property tax process. We welcome your comments and questions, which can be ed to us at thuening@co.sanmateo.ca.us. THREE ELECTED COUNTY OFFICIALS PROVIDE MANY OF THE CHECKS AND BALANCES THAT GOVERN THIS TAX PROCESS Warren Slocum Tom Huening, CPA, CPFO Lee Buffington Assessor-County Clerk-Recorder Controller Treasurer-Tax Collector (650) (650) (650) Published May 2007 by the County Controller, Tom Huening, CPA, Certified Public Finance Officer, (650) thuening@co.sanmateo.ca.us

2 Parcel Ownership and Taxpayers Annually, whoever owns taxable property on January 1 (the lien date) becomes liable for property tax based on the value of the property. The assessed value for most property is the prior year s assessed value adjusted for inflation up to 2%. However, if there has been a change in ownership, the new assessed value will be the market value of the property that changed ownership. New construction value is added to the property s prior base values. The owners of property in San Mateo County are responsible for timely payments of taxes, and late penalties can be significant. Principal Taxpayers Type of Business Assessed Value % of Total Assessed Value United Airlines Air Transportation $ 1,651,553, % Genentech Biopharmaceutical 1,615,111, % Pacific Gas & Electric Utility 1,321,191, % Oracle Software 533,256, % Sun Microsystems Software 331,310, % AT&T of California Utility 329,640, % Pacific Shores Development Commercial RE 325,096, % Wells REIT II University Circle LP Commercial RE 293,000, % Tyco Electronics Manufacturing 287,929, % Westport Office Park LLC Commercial RE 239,700, % Total Top 10 Principal Taxpayers $ 6,927,791, % The top ten taxpayers make up only 5.61% of total valuation. This is an indicator that the County has diversification within its tax base. The County has 218,377 parcels that include both residential (homes, condos, and apartments) and non-residential (businesses, hotels, retail, etc.) property. Utilities and railroads are valued across multiple parcels. Business personal property (machinery and equipment) is taxable where it has established permanent status ; while vessels (boats) are assessed where moored, and aircraft are taxed at the location of the airport. Under Prop 13, similar properties can have substantially different assessed values based on the date of purchase. Major Reappraisals - Secured Property* Total Assessed Value $ 104,309,245,065 Reason for Change in Appraisal: 2% Prop 13 CPI adjustment $ 2,110,881,405 Property Ownership Changes 5,662,837,986 New Construction 531,021,607 Other 1,575,029,330 9,879,770, Total Assessed Value $ 114,189,015,393 * Excludes unsecured and unitary properties. Reappraisal based on ownership changes and new construction accounted for the major increase in valuation change last year. The 2% inflation adjustment also contributes to the increase in base value. 2

3 Assessor Values Property The primary responsibility of the County Assessor is to determine taxable value of each property so that each owner is assured of paying the proper amount of property tax for the support of local government. The main categories of taxable property include real property (secured) and business personal property, vessels and aircraft (unsecured). Real property is defined as land, mines, minerals, timber and improvements such as buildings, structures, crops, trees and vines. Personal property includes items such as machinery, equipment, office tools and supplies. It is important to note that there are numerous full and partial exclusions/exemptions provided by the State Constitution and the legislature that relieve certain taxpayers from the burden of paying property taxes. Fiscal Year Historical Assessed Value of Property in the County (in billions) Assessed Valuation Percent Increase % % % % % % % % % % % % % % % % % % % % % % % % % % % % Includes all property (secured and unsecured) net of all exemptions. Assessed value is determined and enrolled to the person owning it on January 1, which is the tax lien date. As an example, property change in ownership (sales) and new construction (captured from permits) during the prior calendar year 2005 are valued and enrolled as of January 1, The 2% inflation adjustment is applied along with exemptions and other appraisable events. The net assessed value of $113.2 billion as of January 1, 2006 is then taxed for the fiscal year July 1, 2006 to June 30, Other significant processes include: A Supplemental roll places reappraisals into immediate effect on the date of transfer or the new construction completion date rather than waiting for the next lien date; resulting in the capture of tax for a portion of the current fiscal year. A Unitary roll contains properties such as railroads and utilities crossing the county and is valued by the State Board of Equalization. An assessment appeals process allows taxpayer to dispute values through administrative and judicial processes. The leading indicators of property tax growth are property transfer tax (PTT) and supplemental property tax (Supp Tax) growth rates, which are trending upward in FY 05-06, reflecting the increase in assessed value (AV) growth. PTT (in hundred thousands) Supp Tax (in millions) AV Growth (in hundred millions) $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 County General Fund AV Growth vs. Property Transfer & Supplemental Taxes Fiscal Year Ending June 30 For more information on the assessment process visit: 3

4 Controller Prepares Tax Roll Once the assessed valuation is determined and enrolled by the Assessor, it is delivered to the Controller by July 1. The tax roll is then prepared by the Controller by multiplying the value of each parcel by the 1% tax rate plus the amount necessary to make annual payments on bonds or other indebtedness approved by the voters to finance local facilities. The majority of outstanding bonds in the County are for school facilities. 3-Year Total Tax Levy Fiscal Year Amount $ 1,250,041, $ 1,338,522, $ 1,475,636,023 In addition, numerous fixed charges approved by voters or permitted by legislation are added to the tax roll (examples include sewer, flood control, and library assessments). This determines the legal liability per parcel and is passed on to the Tax Collector by September 30. Since 1978, bonds require a two-thirds super majority vote, but effective January 1, 2001, certain bonds for school facilities can be approved by 55% of voters Tax Calculation Secured Value - Local $ 114,189,015,393 Secured Value - SBE non-unitary 54,960,932 Unsecured Value 7,619,728,383 Unitary Value* 1,085,438,320 Taxable Value (Before exemption) 122,949,143,028 Homeowners' Exemptions 935,848,439 Total Taxable Value $ 123,884,991,467 1% General Tax Rate x 1% Property Tax $ 1,238,849,915 Bonds 103,077,483 Fixed Charges & Special Assessments 133,708,625 Total Tax Levy $ 1,475,636,023 * Unitary properties (group of utility and railroad properties that function as a unit) are assessed annually by the State Board of Equalization. School District Bonds Bonds Issued Taxes per $100K District Debt Authorized by Voters Amount Originally Issued Balance as of 6/30/2006 Assessed Value Elementary Belmont $ 11,720,000 $ 11,720,000 $ 11,440,000 $ Brisbane 10,996,439 10,996,439 10,961, Burlingame 19,220,000 19,220,000 16,895, Hillsborough 13,500,000 13,500,000 11,950, Jefferson 52,000,000 52,000,000 50,500, Las Lomitas 24,000,000 24,000,000 22,774, Pacifica 30,221,712 30,221,712 29,401, Menlo Park 21,570,000 21,570,000 18,840, Portola Valley 23,000,000 23,000,000 21,330, Ravenswood 16,000,000 16,000,000 14,320, Redwood City 65,995,163 65,995,163 60,400, San Bruno 29,999,893 24,553,566 24,553, San Carlos 21,750,000 21,750,000 20,825, San Mateo/Foster City 106,305, ,305,000 98,235, Woodside 5,415,000 5,415,000 5,265, High Schools Jefferson 27,560,000 27,560,000 24,895, San Mateo 133,459, ,459, ,489, Sequoia Union 198,440, ,440, ,635, Unified Schools Cabrillo 35,000,000 35,000,000 25,241, South San Francisco 39,999,954 39,994,954 33,504, College District SMC Community College 207,000, ,000, ,175,

5 Treasurer-Tax Collector Issues Bills & Collects Taxes The Tax Collector sends annual secured tax statements (bills) by November 1. The bill can be paid in two installments due November 1 and delinquent after December 10 and due February 1 and delinquent after April 10. (Note that payment due dates are well into the fiscal year July to June, when they become due). Supplemental tax may be billed when there is a change in ownership or when new construction is complete. Penalties for late payments are significant at 10% for the first installment delinquency, 10% plus $40 for the second installment delinquency and an additional 1.5% per month beginning the following July 1. After 6 years of taxes being delinquent property can be sold at a tax sale to pay the tax. As a result of the strong property values in San Mateo County, delinquency rates are among the lowest in the state. Number of Tax Bills Issued Fiscal Year Secured Unsecured Supplemental Total ,933 19,068 20, , ,112 20,235 20, , ,177 19,404 14, ,589 Delinquent Tax Payment History as of June 30th of the Fiscal Year Due Fiscal Year Amount Rate ,528, % ,965, % ,623, % ,803, % ,215, % ,620, % ,399, % ,868, % ,562, % ,057, % Taxpayer Jane You can now pay your taxes online at: 5

6 Controller Distributes Property Taxes After collection, the Tax Collector forwards the taxes to the Controller for apportionment and distribution to all eligible jurisdictions in the County. The law requires the Controller to allocate the revenue in accordance with specified formulas and procedures as explained on page 12. Summary of Fiscal Year Incremental Secured, Unsecured & Homeowners Exemptions FUND NO TAXING AGENCY PRIOR YEAR 1 ACTUAL TAXES NET OF RDA CURRENT YEAR 2 TAXES NET OF RDA CURRENT YEAR INCR GROWTH $ CURRENT YEAR INCR GROWTH % VLF /SWAP FY 06/ COUNTY -GENERAL FUND $ 150,976,193 1 $ 159,698,030 2 $ 8,721, % $ 63,336,649 CITIES AND CITY-MANAGED SPECIAL DISTRICTS TOWN OF ATHERTON 3,675,402 $ 4,046,144 $ 370, % $ 523, CITY OF BELMONT 2,210,759 2,449, , % 1,693, CITY OF BRISBANE 1,540,751 1,675, , % 242, CITY OF BURLINGAME 7,742,624 8,408, , % 1,883, TOWN OF COLMA 48,566 56,924 8, % 97, CITY OF DALY CITY 12,737,764 13,840,555 1,102, % 6,968, DALY CITY SANI DIST 1,146,798 1,254, , % CITY OF EAST PALO ALTO 3,515,486 3,925, , % 2,487, CITY OF HALF MOON BAY 1,040,397 1,128,779 88, % 852, TOWN OF HILLSBOROUGH 8,077,785 8,721, , % 723, CITY OF MENLO PARK 6,430,401 6,847, , % 1,996, CITY OF MILLBRAE 3,004,654 3,248, , % 1,414, CITY OF PACIFICA 7,010,994 7,619, , % 2,645, TOWN OF PORTOLA VALLEY 624, ,868 54, % 302, PORTOLA VALLEY RANCH RD % WOODSIDE HILAND RD MAINT 21,051 21, % REDWOOD CITY AREA #1 13,605,067 14,653,067 1,048, % 4,917, REDWOOD CITY AREA #3 6,547,348 6,991, , % REDWOOD CITY PARKING #1 23,652 23,528 (124) -0.52% REDWOOD CITY GEN IMP DS I , ,378 30, % CITY OF SAN BRUNO 4,469,097 4,896, , % 2,930, CITY OF SAN CARLOS 5,399,025 5,786, , % 1,849, CITY OF SAN MATEO 18,605,138 20,213,329 1,608, % 6,174, CITY OF SO SAN FRANCISCO 11,099,266 12,281,105 1,181, % 4,206, TOWN OF WOODSIDE 1,395,913 1,519, , % 384, TOWN CTR SEWER MAINT 22,716 32,459 9, % - TOTAL CITIES $ 120,544,880 $ 130,900,777 $ 10,355, % $ 42,293,932 SCHOOL DISTRICTS BAYSHORE ELEM 776,256 $ 721,615 $ (54,641) -7.04% BELMONT ELEM 15,748,597 17,075,576 1,326, % BRISBANE ELEM 2,935,990 3,221, , % BURLINGAME ELEM 9,776,757 10,616, , % HILLSBOROUGH ELEM 10,012,414 10,812, , % JEFFERSON ELEM 15,827,267 17,436,964 1,609, % PACIFICA SCHOOL DISTRICT 9,334,427 10,113, , % LAS LOMITAS ELEM 8,051,233 8,738, , % MENLO PARK ELEM 13,589,116 14,754,652 1,165, % MILLBRAE ELEM 7,953,955 7,882,999 (70,957) -0.89% PORTOLA VALLEY ELEM 6,263,880 6,741, , % RAVENSWOOD ELEM 5,286,672 5,704, , % REDWOOD CITY ELEM 28,617,971 30,904,358 2,286, % SAN BRUNO ELEM 11,493,880 12,475, , % SAN CARLOS ELEM 9,889,516 10,585, , % SAN MATEO-FOSTER CITY ELEM 40,941,944 44,345,273 3,403, % WOODSIDE ELEM 3,514,831 3,896, , % JEFFERSON HIGH SCH 23,753,624 25,900,522 2,146, % SAN MATEO HIGH SCH 68,395,257 73,190,558 4,795, % SEQUOIA HIGH SCH 65,783,592 71,139,042 5,355, % CABRILLO UNIFIED SCH 14,848,748 16,137,163 1,288, % LA HONDA-PESCADERO UNI 2,386,630 2,552, , % SO SAN FRANCISCO UNI 40,453,364 44,405,887 3,952, % SAN MATEO JR COLLEGE 71,639,525 77,349,133 5,709, % COUNTY EDUCATION TAX 37,281,940 40,253,301 2,971, % EDUC REV AUG FUND (ERAF) 148,147, ,747,962 11,600, % TOTAL SCHOOL DISTS. $ 672,704,698 $ 726,703,186 $ 53,998, % $ - 1 RDAs are Redevelopment Agencies. The prior year taxes in this column include ERAF I and ERAF II amounts. 2 The current year taxes in this column are actual collections of current unsecured, homeowners exemptions and estimated levy from current secured. 6

7 1 Growth and Property Tax Allocation by Fund (exclusive of Unitary & General Aircraft Revenue) The County s General Fund allocation is $279.3million. TRIPLE FLIP FY 06/07 TOTAL SWAP & TRIPLE FLIP CURRENT YR ALLOCATION NET OF SB1096 EXCESS ERAF & DEFICIT NON BASIC AID SCHOOLS3 $ 4,234,284 $ 67,570,933 $ 227,268,963 $ 52,109,243 $ 279,378, % 3 CURRENT YEAR ALLOCATION NET OF EXCESS ERAF PCT OF TOTAL $ 36,108 $ 559,627 $ 4,605,771 $ 435,194 $ 5,040, % 970,452 2,663,911 5,113, ,320 5,516, % 1,035,277 1,277,829 2,953, ,780 3,130, % 2,293,048 4,176,200 12,584, ,598 13,388, % 2,256,523 2,354,490 2,411,414 66,212 2,477, % 2,173,832 9,142,289 22,982,844 1,858,744 24,841, % - 1,254, ,038 1,482, % 648,382 3,135,624 7,060, ,768 7,326, % 503,879 1,356,312 2,485, ,747 2,621, % 19, ,116 9,464, ,163 10,181, % 1,630,180 3,626,598 10,474, ,292 11,298, % 608,139 2,022,422 5,271, ,455 5,640, % 383,640 3,029,462 10,649, ,892 11,578, % 43, ,208 1,025,076 77,320 1,102, % % - 21,924 21, % 5,024,902 9,942,730 24,595,797 2,304,546 26,900, % - 6,991, ,901 7,300, % - 23, , % - 579,378 20, , % 1,804,185 4,734,583 9,630, ,915 10,193, % 1,638,993 3,488,101 9,274, ,114 9,963, % 4,287,067 10,461,778 30,675,107 1,862,524 32,537, % 3,200,673 7,407,472 19,688,577 1,410,472 21,099, % 105, ,796 2,009, ,146 2,158, % , , % 28,663,616 $ 70,957,548 $ 201,858,325 $ 14,604,405 $ 216,462, % - $ 721,615 $ (360,558) $ 361, % - 17,075,576 17,075, % - 3,221,026 3,221, % - 10,616,518 (2,259,510) 8,357, % - 10,812,662 10,812, % - 17,436,964 (3,876,909) 13,560, % - 10,113,892 (2,167,699) 7,946, % - 8,738,231 8,738, % - 14,754,652 14,754, % - 7,882,999 (1,828,727) 6,054, % - 6,741,546 6,741, % - 5,704,197 (2,210,384) 3,493, % - 30,904,358 (7,155,440) 23,748, % - 12,475,050 12,475, % - 10,585,812 (2,430,946) 8,154, % - 44,345,273 (10,760,275) 33,584, % - 3,896,543 3,896, % - 25,900,522 (5,985,805) 19,914, % - 73,190,558 73,190, % - 71,139,042 71,139, % - 16,137,163 (3,434,452) 12,702, % - 2,552,704 (543,618) 2,009, % - 44,405,887 (11,581,043) 32,824, % - 77,349,133 (17,970,294) 59,378, % - 40,253,301 40,253, % (141,739,643) 18,008,319 72,565,660 90,573, % $ - $ (141,739,643) $ 584,963,543 $ - $ 584,963, % Where Do Property Taxes Go? County General Fund 21.5% Cities 16.7% School Districts 45.1% Redevelopment Agencies 7.5% Independent Districts 7.2% Dependent Districts 2.0% See page 9 for definitions of ERAF, Revenue Limit, and Basic Aid. The net effect of the Swap and the Flip is a $141.7 million decrease in taxes allocated to the ERAF fund. Local school districts receive an allocation of $584.9 million. 3 Excess ERAF is that portion of the ERAF tax shift available after distribution to school districts to meet their revenue limit. Excess ERAF refunded in FY06-07 comprises of: 2003 remaining 10% of Reserve Balance; 2006 remaining balance due, net of reserve; and % of the excess ERAF, net of reserve.rdas are not entitled to excess ERAF. 7

8 Controller Distributes Property Taxes cont. Summary of Fiscal Year Incremental Secured, Unsecured & Homeowners Exemptions FUND NO TAXING AGENCY PRIOR YEAR CURRENT YEAR ACTUAL TAXES TAXES NET OF NET OF RDA1 RDA2 CURRENT YEAR INCR GROWTH $ CURRENT YEAR INCR GROWTH % VLF /SWAP FY 06/07 REDEVELOPMENT AGENCIES BELMONT-LOS COSTANOS $ 5,407,608 1 $ 5,213,3602 $ (194,248) -3.59% BRISBANE NO.1 2,534,916 3,267, , % BRISBANE NO. 2 1,029,515 1,064,520 35, % DALY CITY 2,858,300 3,049, , % DALY CITY BAYSHORE 2,298,385 2,867, , % EPA GATEWAY 2,827,915 2,954, , % EPA RAVESNWOOD 372, ,372 54, % EPA UNIV. CIRCLE 1,269,410 3,721,446 2,452, % FOSTER CITY HILLS-GULL 263, ,557 (2,705) -1.03% FOSTER CITY MARLIN COVE 716, ,362 29, % FOSTER CITY COMMUNITY 11,257,601 12,505,581 1,247, % MENLO PARK LAS PULGAS 8,318,119 8,417,749 99, % MILLBRAE 2,034,156 2,540, , % PACIFICA ROCKAWAY BEACH 238, ,140 55, % REDWOOD CITY NO. 2 ANNEX 5,249,907 6,498,445 1,248, % REDWOOD CITY NO. 2 3,380,303 3,359,117 (21,186) -0.63% SAN BRUNO 2,719,711 5,454,259 2,734, % SAN CARLOS 2,802,893 3,189, , % SAN MATEO DOWNTOWN 4,224,841 4,551, , % SAN MATEO SHORELINE 6,277,093 7,051, , % SSF EL CAMINO ANNEX 147, ,127 75, % SSF EL CAMINO ANNEX 1,530,512 2,056, , % SSF UN STEEL PLANT SITE 2,308,206 2,418, , % SSF GATEWAY 5,914,629 7,303,792 1,389, % SSF DOWNTOWN -CENTRAL 7,336,700 7,815, , % TOTAL RDAS $ 83,319,152 $ 97,251,625 $ 13,932, % $ - INDEPENDENT DISTRICTS GUADALUPE VALLEY IMP 28,120 $ 28,085 $ (36) -0.13% ESTERO MUNI IMP 9,147,925 9,835, , % 2,149, BELMONT FIRE DIST 5,014,011 5,542, , % BELMONT SPEC FIRE Z-1 32,590 45,800 13, % BELMONT SPEC FIRE Z-2 1,671 1, % BELMONT SPEC FIRE Z-3 39,621 42,056 2, % BAYSHORE SANI DIST 72,151 67,870 (4,281) -5.93% GRANADA SANI DIST 383, ,014 37, % MONTARA SANI DIST 314, ,997 25, % ATHERTON CHANNEL DRNGE 51,850 56,494 4, % MID-PENINSULA WATER 106, ,611 11, % CANADA COUNTY WATER 19,983 20, % COASTSIDE CO. WATER 532, ,074 48, % LOS TRANCOS CO. WATER 159, ,554 16, % NO. COAST CO. WATER 374, ,644 33, % SKYLINE CO. WATER 145, ,682 11, % WESTBOROUGH CO. WATER 191, ,770 18, % MIDPENIN REG OP SPACE 7,111,832 7,682, , % WEST PK PKS & PKWYS 353, ,977 26, % STONEGATE PK & PKWYS 174, ,957 17, % WEST PARK 3 PK & PKWY 560, ,113 44, % WILLOW GDNS PK & PKWYS 36,471 36,400 (71) -0.20% WAYSIDE RD MAINT Z-2 12,696 13, % CRESCENT AVE MAINT Z-A 1,284 1, % CRESCENT AVE MAINT Z-B 4,885 4, % CRESCENT AVE MAINT Z-C % CRESCENT AVE MAINT Z-D % BAY AREA AIR QUALITY 2,207,418 2,383, , % S.M. CO. HARBOR DIST 2,801,014 3,026, , % PENINSULA HOSP DIST 3,448,770 3,685, , % SEQUOIA HOSP DIST 6,200,714 6,703, , % RESOURCE CONSERVATION 36,127 39,156 3, % BROADMOOR POLICE 816, ,700 70, % COLMA FIRE DIST 521, ,302 58, % HMB FIRE DIST 4,811,550 5,228, , % MENLO PARK FIRE DIST 20,178,420 21,831,893 1,653, % PT MONTARA FIRE DIST 1,111,227 1,202,736 91, % WOODSIDE FIRE DIST 9,343,843 10,161, , % EPA SANI DIST 249, ,672 28, % HIGHLANDS REC 242, ,046 15, % LADERA REC DIST 88,402 96,432 8, % MOSQUITO ABATEMENT 1,259,394 1,354,483 95, % TOTAL INDEPEND. DISTRICTS $ 78,190,567 $ 84,686,038 $ 6,495, % $ 2,149,679 1 RDAs are Redevelopment Agencies. The prior year taxes in this column include ERAF I and ERAF II amounts. 2 The current year taxes in this column are actual collections of current unsecured, homeowners exemptions and estimated levy of current secured. 8

9 Growth and Property Tax Allocation by Fund (exclusive of Unitary & General Aircraft Revenue) TRIPLE FLIP FY 06/07 CURRENT YR EXCESS ERAF & TOTAL SWAP & ALLOCATION NET DEFICIT NON BASIC TRIPLE FLIP OF SB1096 AID SCHOOLS3 CURRENT YEAR ALLOCATION NET OF EXCESS ERAF PCT OF TOTAL $ - $ 5,213,360 3 $ 5,213, % - 3,267,692 3,267, % - 1,064,520 1,064, % - 3,049,750 3,049, % - 2,867,778 2,867, % - 2,954,379 2,954, % - 427, , % - 3,721,446 3,721, % - 260, , % - 745, , % - 12,505,581 12,505, % - 8,417,749 8,417, % - 2,540,679 2,540, % - 293, , % - 6,498,445 6,498, % - 3,359,117 3,359, % - 5,454,259 5,454, % - 3,189,868 3,189, % - 4,551,188 4,551, % - 7,051,984 7,051, % - 223, , % - 2,056,261 2,056, % - 2,418,911 2,418, % - 7,303,792 7,303, % - 7,815,308 7,815, % $ - $ - $ 97,251,625 $ - $ 97,251, % $ - $ 28,085 $ 9,181 $ 37, % 1,061,483 3,211,162 13,046, ,703 13,608, % - 5,542,699 5,542, % - 45,800 45, % - 1,692 1, % - 42,056 42, % - 67,870 43, , % - 421, , , % - 339, , , % - 56,494 4,115 60, % - 118,611 38, , % - 20,382 20, % - 581, , , % - 175,554 37, , % - 408, , , % - 157,682 65, , % - 209,770 96, , % - 7,682, ,208 7,825, % - 379,977 9, , % - 191,957 13, , % - 605,113 9, , % - 36,400 2,749 39, % - 13,018 1,499 14, % - 1,307 1, % - 4, , % % % - 2,383,361 34,897 2,418, % - 3,026, ,190 3,619, % - 3,685,153 3,685, % - 6,703,973 6,703, % - 39,156 3,166 42, % - 886, ,891 1,024, % - 580, , % - 5,228, ,159 5,553, % - 21,831,893 1,248,486 23,080, % - 1,202,736 85,735 1,288, % - 10,161, ,342 10,793, % - 278, , , % - 258,046 41, , % - 96,432 18, , % - 1,354, ,888 1,474, % $ 1,061,483 $ 3,211,162 $ 87,897,200 $ 5,165,772 $ 93,062, % GLOSSARY ERAF Education Revenue Augmentation Fund. The State passed into law two tax shifts, ERAF I (beginning FY ) and ERAF II (beginning FY ) to balance the State budget by shifting local AB8 property tax revenues from counties, cities, special districts, and redevelopment agencies to K-12 schools and community colleges. The base ERAF I and II tax shift amount for each entity were specified by the State based on population and other factors and are adjusted yearly per the incremental growth in property assessed values. Revenue Limit Every California school district is entitled to a minimum amount of funding per student. Revenue Limit schools receive a property tax share that is less than this limit (approx. $5,000 per elementary/middle school student), so the State makes up the difference. Basic Aid These school districts receive more local property tax than the minimum state Revenue Limit, so they are not funded by the State. Basic Aid districts (10 of 24 currently in the County and 60 in the State) get to keep and spend all of the property tax they receive, including that amount in excess of the Revenue Limit. 3 Excess ERAF is that portion of the ERAF tax shift available after distribution to school districts to meet their revenue limit. Excess ERAF refunded in FY06-07 comprises of: 2003 remaining 10% of Reserve Balance; 2006 remaining balance due, net of reserve; and % of the excess ERAF, net of reserve. RDAs are not entitled to excess ERAF. 9

10 Controller Distributes Property Taxes cont. Summary of Fiscal Year Incremental Secured, Unsecured & Homeowners Exemptions FUND NO TAXING AGENCY PRIOR YEAR ACTUAL TAXES NET OF RDA CURRENT YEAR TAXES NET OF RDA 1 2 CURRENT YEAR INCR GROWTH $ CURRENT YEAR INCR GROWTH % VLF /SWAP FY 06/07 DEPENDENT DISTRICTS (COUNTY) FREE LIBRARY $12,600,574 $ 13,557,746 $ 957, % CO. FIRE PROTECTION 4,319,810 4,286,869 (32,942) -0.76% CO. SERVICE AREA #1 1,671,139 1,778, , % CO. SERVICE AREA #6 40,450 44,146 3, % CO. SERVICE AREA #8 644, ,812 54, % BURLINGAME HILLS SEWER 43,072 46,422 3, % EMERALD LAKE HTS SEWER 10,885 11, % FAIR OAKS SEWER 292, ,035 24, % HARBOR INDUSTRIAL SEWER 5,683 6, % KENSINGTON SQ SEWER 8,154 8, % OAK KNOLL SEWER 2,517 2, % CRYSTAL SPRINGS SANI 39,012 41,597 2, % DEVONSHIRE CO. SANI 19,438 21,167 1, % SCENIC HTS SANI 942 1, % CAMPO BELLO UNIV PK DR 1,961 2, % COLMA CREEK FLOOD CTRL 398, ,001 39, % COLMA CREEK FLOOD Z-3 1,011,683 1,098,149 86, % COLMA CREEK FLOOD Z-2 376, ,859 65, % COLMA CREEK FLOOD Z-1 91,267 96,898 5, % SAN BRUNO CREEK Z-2 159, ,264 16, % SAN FRANCISQUITO Z-2 162, ,830 12, % RAVENSWOOD SLOUGH FL 3,728 4, % ENCHANTED HILLS DRAINAGE 1,294 1, % HIGHLANDS DRAINAGE % PA GARDENS DRAINAGE E. P. A. DRAINAGE MAINT 36,755 46,084 9, % SEQUOIA DRAINAGE 1,448 1, % UNIVERSITY HTS DRAINAGE 9,967 11,100 1, % BEL AIRE LIGHTING 32,485 34,459 1, % BELMONT LIGHTING 3,852 4, % COLMA LIGHTING 74,593 82,839 8, % EL GRANADA LIGHTING 40,957 45,315 4, % EMERAL LAKE LIGHTING 134, ,860 12, % ENCHANTED HILLS LIGHTING 6,064 6, % LA HONDA LIGHTING 8,180 8, % MENLO PARK LIGHTING 154, ,163 15, % MONTARA LIGHTING 61,114 66,223 5, % PESCADERO LIGHTING 6,791 6, % RAVENSWOOD LIGHTING 137, ,402 14, % S.M. CO. WATERWORKS # HIGHLANDS LANDSCAPE 5,510 6, % TOTAL DEPENDENT DISTRICTS $ 22,618,834 $ 24,044,795 $ 1,425, % $ - COUNTYWIDE TOTALS $ 1,128,354,324 $ 1,223,284,451 $ 94,930, % $ 107,780,260 1 RDAs are Redevelopment Agencies. The prior year taxes in this column include ERAF I and ERAF II amounts. 2 The current year taxes in this column are actual collections of current unsecured, homeowners exemptions and estimated levy of current secured. 10

11 Growth and Property Tax Allocation by Fund (exclusive of Unitary & General Aircraft Revenue) TRIPLE FLIP FY 06/07 TOTAL SWAP & TRIPLE FLIP CURRENT YR ALLOCATION NET OF SB1096 EXCESS ERAF & DEFICIT NON BASIC AID 3 SCHOOLS CURRENT YEAR ALLOCATION NET OF EXCESS ERAF PCT OF TOTAL $ - $ 13,557,746 $ 1,512,607 $ 15,070, % - 4,286,869 4,286, % - 1,778,782 1,778, % - 44,146 3,253 47, % - 698,812 23, , % - 46,422 19,449 65, % - 11,832 5,389 17, % - 317, , , % - 6,138 3,677 9, % - 8,623 3,249 11, % - 2,616 1,268 3, % - 41,597 19,864 61, % - 21,167 8,861 30, % - 1, , % - 2, , % - 438,001 45, , % - 1,098,149 70,398 1,168, % - 441,859 32, , % - 96,898 9, , % - 176,264 12, , % - 174,830 17, , % - 4,046 1,104 5, % - 1, , % % % - 46,084 2,730 48, % - 1, , % - 11,100 1,272 12, % - 34,459 14,920 49, % - 4,052 1,579 5, % - 82,839 28, , % - 45,315 4,236 49, % - 146,860 52, , % - 6,318 2,290 8, % - 8,792 3,686 12, % - 170,163 70, , % - 66,223 30,121 96, % - 6,985 3,384 10, % - 151,402 63, , % % - 6, , % $ - $ - $ 24,044,795 $ 2,225,387 $ 26,270, % See page 9 for definitions of ERAF, Revenue Limit, and Basic Aid. This allocation does not include $13.6 million of Unitary & General Aircraft taxes which are distributed under different formulas. $ 33,959,383 $ - $ 1,223,284,451 $ 74,104,807 $ 1,297,389, % 3 Excess ERAF is that portion of the ERAF tax shift available after distribution to school districts to meet their revenue limit. Excess ERAF refunded in FY06-07 comprises of: 2003 remaining 10% of Reserve Balance; 2006 remaining balance due, net of reserve; and % of the excess ERAF, net of reserve. RDAs are not entitled to excess ERAF. 11

12 Controller Distributes Property Taxes After collection, the Tax Collector forwards the tax revenue to the Controller for apportionment and distribution to all eligible jurisdictions in the County. The law requires the County Controller to allocate the revenue in accordance with specified formulas and procedures. AB8 (Assembly Bill 8 of ), with many subsequent amendments, governs the complicated tax allocation process. Each taxing jurisdiction (entity) was assigned a base amount of property tax determined by revenue. Each year, the entity is then allocated an amount equal to the total received in the previous year plus a percentage of tax growth within the geographic tax area served by the entity. Around October of each year, the Controller provides each taxing agency an estimate of its property tax revenue. These estimates are based on the tax rolls compiled by the Assessor. During the year, the Assessor and the Assessment Appeals Board approve tax roll corrections that change the original levy, some of which result in refunds to taxpayers. Due to changing economic conditions, as well as misfortunes and calamities, total refunds fluctuate substantially from year to year, making it imperative that taxing agencies budget conservatively and maintain an appropriate amount of reserves. Adding to the complex tax allocation process, legislation (SB1096) was enacted in fiscal year that (for only cities and the county) permanently swaps Vehicle License Fee revenue for Property Taxes (the Swap ) and temporarily exchanges Sales Tax Revenues ( Flip ) for Property Taxes. The Flip expires when the State Deficit Bonds are retired in approximately years. In addition, the enacted legislation required additional revenues to be shifted away from most taxing agencies to the Education Revenue Augmentation Fund ( ERAF III Shift ) for the and fiscal years. The legislation specifies that the property tax revenues necessary for the Swap and Flip are to be taken from the ERAF Fund while the two-year ERAF III Shift will be added to the fund. For fiscal year the total Swap was $107.7 million and the Flip was $33.9 million of additional property taxes for cities and the county. The net effect of the Swap and the Flip was a decrease of $141.7 million of property tax revenue allocated to the ERAF Fund. For fiscal year , overall countywide property tax growth remains strong; ranging from 5.15% for the unincorporated areas to 25.97% for City of East Palo Alto. Total countywide property taxes (including general, bonds and special assessments/taxes) increased by $137.1 million, representing a 10.2% increase from the prior year. Listed on the page 6-11 is a summary of the growth percentage and taxes for the various agencies that receive property tax revenue. As you will notice there are large fluctuations in growth percentages between agencies due to growth in the various geographic regions within the county. I hope you will take the time to provide us with your thoughts or ideas for improvement after reading this year s report. Drop me a note at thuening@co.sanmateo.ca.us or call my office at (650) I look forward to hearing from you. Tom Huening, CPA, CPFO Controller County Property Taxes The County receives property taxes for the General Fund and eight types of dependent special districts. The dependent district taxes are allocated directly to the entity to provide specific services within geographic areas. The most significant district services are free library and fire. The General Fund property tax is the most important tax source for the County. It is 60% of the County s discretionary revenue. This source of tax is the historic funding for public safety, law and justice. However, the state requires mandated services in health and public assistance without adequate funding that also compete for this important revenue source. Property Taxes 60% Discretionary Revenue by Type Other Taxes 4% Property Tax In-Lieu of VLF 23% Other Revenues 7% Sales and Use Taxes 6% For more information on tax apportionment visit: 12