AgdaPkt 2002-05-06 - Laserfiche WebLink

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I '1 IREP 0 R T ,o the Honorable Mayor and City Counc, From the City Manager May 6, 2002 Subject Assembly Bill 2100 - Limitation on Property Tax Revenue Shifts Recommendation Approve the attached resolution supporting AB 2100 that would restore property taxes to local governments. Background In FY 1992/93, the State of California began diverting a portion of the property taxes from local governments to finance a portion of the state's obligations to schools (known as the Educational Revenue Augmentation Fund - ERAF -legislation). In Redwood City, this has resulted in an ongoing 20% reduction in the property taxes. Presently this amounts to a loss of approximately $4 million in property taxes that the City would have received in FY 2001/02. In proportion to our estimated revenues this year, $4 million translates into about 6.7% of general fund revenues and is roughly equal to our potential deficit for FY 2002/03. AB 2100 as introduced by Assembly Member Joe $imitian would, if enacted into law, begin reducing the amount of local property taxes diverted from local governments to the state. Effective July 2005, this bill would begin restoring to local governments the property taxes shifted to the state. The League of California Cities has reviewed AB 2100 and supports its passage. Fiscal Impact Should this bill become signed into law, Redwood City could receive between $400,000 and $450,000 in increased property tax revenue in FY 2005/06 depending upon changes in citywide assessed valuations in future years. Alternative The Council could elect not to adopt this resolution of support if it is determined that this bill is inconsistent with the Council's values and priorities. Bnan Ponty Edward Everett Director of Finance and Financial Planning City Manager