HomeMy WebLinkAboutMINUTES - 12061988 - 2.3 TQ: _ OF SUPERVISORS
FROM. Phil ,Batchelor., Cwtra
County Administrator coo�
DATE' December .6 , 1988 COJ*
SUBJECT: PROPOSITION 90
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
Set a hearing time for February 28, 1989 at 11:00 a.m. to consider whether
to implement Proposition 90, and solicit comments from all the affected
taxing entities to be received prior to the hearing.
FINANCIAL IMPLICATIONS:
There. are no direct financial implications from holding the hearing.
However, it is estimated that if the Board enacts Proposition 90, the
annual loss to the County would range from a low of $99,225 in the first
year plus administrative costs up to' a high by year five of $433 ,074, plus
administrative costs. The total loss"to all taxing entities- if Proposition
90 is implemented is estimated to be $367,500 for the first year of
implementation, and $1,603 , 977 , cumuiative, by year five.
BACKGROUND:
Provisions of Proposition 90
Proposition 90 extended a law enacted in 1986 to include taxpayers who
transfer residence from one county to another. The bill authorizes any
person over the age of 55 years old who resides in a property which is
eligible for the homeowners ' exemption to transfer the base year value of
that residence to a replacement dwelling of equal or lesser value located
in the same county or - in another county. To overcome resistance from the
California State Assessor' s Association, due to administrative barriers and
potential revenue loss, the provision was made optional by county. Before
any Board of Supervisors can enact this provision, it must "consult" with
the other taxing entities which would stand to lose funding, and hold a
hearing prior to implementing the provisions of the act.
I
Arguments Against Enacting Proposition 90
1. Administrative Burden
The Assessor estimates the enactment of Proposition 90 would create
additional workload for both the clerical and the appraisal staff,
which when equated into cost based on an hourly rate, indicates an
increased cost in the first year of $15 , 584. The Assessor also notes
CONTINUED ON ATTACHMENT: - YES SIGNATUREQ�
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
S I GNATURIZ(S 1:
ACTION OF BOARD ON - Decemher -6 , 1988 APPROVED AS RECOMMENDED >< OTHER
VOTE OF SUPERV I SMS
I HEREBY CERTIFY THAT THIS IS A TRUE
>< UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES1. AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
cc: Administrator's ,Office ATTESTED DEC 61988
Assessor' s Office PHIL BATCHELOR, CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
BY DEPUTY
M382/7-83
that the county would be highly dependent on other county Assessors '
Offices for information, and since it would result in a revenue loss,
they would expect a very slow turnaround time on request for
information.
2. Erosion of Tax Base/Loss of Revenue
The Assessor estimates that 245 requests would be implemented each
year 'and that this request would result in a loss in assessed value
from the supplemental roll of $12 . 2 million, and an on-going loss from
the secured roll of about $24. 5 million annually. This would increase
annually based on an expected inflation factor on both the secured and
supplemental roll based on current experience. The loss can be
depicted as follows:
Expected Losses From Proposition 90 Implementation
Cumulat.
Secured Supple. County Total
Roll Cumulative Roll Total Property Admin. County
Year Loss Loss Loss Loss Tax Loss Costs** Loss
1 $245 , 000 $ 245, 000 $122, 500 $ 367 , 500 $ 99,255 $15, 584 $114,809
2 $264,600 $ 509,600 $132,300 $ 641, 900 $173 ,,313 $16 , 363 $189, 676
3 $285,768 $ 795 , 368 $142,884 $ 938 , 252 $253 , 328 $17 , 181 $270,509
4 $308, 629 $1,103 ,997 $154, 315 $1, 258, 312 $339,744 $18 ,040 $357,784
5 $333 ,320 $1,437 , 317 $166, 660 $1,603 ,977 $433 ,074 $18 ,942 $452,016
3 . Non-County Residents
The bill will benefit those people who move out of our county, whose
new principal place of residence is significantly higher than the
residence from which they move. For example, current Contra Costa
residents who move to the Central Valley County may be eligible in
greater numbers for such benefit than those from the Valley moving to
Contra Costa County. It could be argued that the Board shouldn' t give
a "tax break" to someone who will no longer be paying taxes in Contra
Costa County. Conversely, the question of equity arises from the
person who is moving from another county who has never paid taxes in
Contra Costa County is getting a "tax break" , which will affect the
services of all taxing entities in the County.
Arguments in Favor of Enacting Proposition 90
1. Voters ' Preference
The 690 of the County' s voters favored giving the Board the authority
to enact the legislation. This is similar to the state-wide average.
It is not known for sure whether the voters were voting for the Board
to have flexibility to say yes or no, or whether they expected the
Board to enact the legislation.
2. Economic Arguments
The proposition is supported by some real estate and building
industries because it could provide an incentive for retirees from
urban counties to purchase homes in Contra Costa County. The thought
here is that there will be more turnover of property because of the
additional tax break than there would be otherwise, which will
eventually result in higher taxes coming to the County. Additionally,
it is felt by some that the people over 55 group most likely to take
advantage of this proposition are those that are the least current
drain on County services.
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Recommendation:
Based on the financial implications alone, we cannot recommend that the
Board enact Proposition 90. However, it would be advisable to hold a
hearing on this subject to try to determine the extent of the public ' s
sentiment on this issue and to ascertain the preference of all of the other
taxing entities which would lose taxes as a result of this change. It is
expected to take a number of weeks to get feedback from all of the taxing
agencies in the County. Therefore, it is recommended that the hearing date
be set far enough in the future that all of the input from those taxing
entities can be received in writing by the County prior to the hearing.
Therefore, it is recommended that February 28, 1989 at 11:00 a.m. , be the
date set for the hearing and that the County Administrator correspond with
each of the other taxing entities of the County to receive their
recommendation prior to the hearing.
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