HomeMy WebLinkAboutMINUTES - 08281984 - 2.8 TO: BOARD OF SUPERVISORS }.
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FROM: Phil Batchelor, County Administrator t.�lJt4n
COSta
DATE: August 23, 1984 County
SUBJECT: Revenue and Taxation Code Section 2607 .1
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION
It is recommended that the Board withhold implementation of Revenue and
Taxation Code Section 2607.1.
BACKGROUND
Earlier this summer, at the request of Supervisor Fanden, my office was asked
to analyze and furnish a recommendation on implementation of Revenue and
Taxation Code Section 2607 .1 . This section was added to the Revenue and
Taxation Code by action of the 1983 California State Legislature; it provides
as follows:
"Upon authorization of the Board of Supervisors, the tax collector
shall accept payment of the second installment of the tax on real
property at a discounted amount, as established annually by the
board, if payment is made on or before the date the first install-
ment is due. "
At issue primarily is whether implementation of this section would improve
the county' s cash position by encouraging early payment of the second install-
ment of property taxes.
A review of this measure with the Office of the Treasurer-Tax Collector
and Office of the County Auditor-Controller indicates that there are
detrimental effects from implementation of this measure. These include the
following: .
1. Some taxpayers now voluntarily pay both installments concurrently at
the time the first installment is due. Under Revenue and Taxation
Code Section 2607.1, such pre-payments would be discounted resulting
in an actual loss in property tax collections, possibly .in the
magnitude of several hundred thousand dollars. The revenue loss
would affect all agencies receiving property taxes .
2. Currently the county borrows on short-term tax exempt notes at the
rate of about 6% per annum. It would be uneconomic .for the
discount rate to exceed the cost of such borrowing. For the four
months involved in early payment at this rate, December 10 rather
than April 10, the resulting discount would not be a significant
incentive for taxpayers.
CONTINUED ON ATTACHMENT: x YES SIGNATURE:
x RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
X APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON August 2H, 19H4 APPROVED AS RECOMMENDED X OTHER
0035'7
VOTE OF SUPERVISORS
X UNANIMOUS (ABSENT 1 ) I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED
J.R. QZSSON, COUNTY CLERK
AND EX OFFICIO CLERK OF THE BOARD
i
M382/7-83 BY (JdL�A�_ DEPUTY
-2-
3 . Expensive manual handling or systems revisions would be
required in the present automated tax collection system.
The present system is based on the processing of two
pre-punched cards, one for each property tax installment.
The discount payment plan would require-'special handling
and accounting, or a costly overall systems revision.
The Treasurer-Tax Collector advises that he is unaware of any county
that has taken action to implement this section.
cc: Tax Collector-Treasurer
Auditor-Controller
County Administrator
00358