AgdaPkt 2004-10-11 - Laserfiche WebLink

Browse Search

C1A,(P TRIPLE FLIP from page 1 · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · BACKGROUND. Voters approved a deficit specific reasons for these differences. First, the first financing bond measure in March 2004, which in- column of the chart includes an estimate of the total cluded a 25 percent reduction in the local Bradley- VLF at the 2% rate (VLF backfill and actual pay- Bums sales tax rate that is to be replaced dollar-for- ments). The estimate used in the May estimates by dollar with property tax revenues with a corresponding the League totaled $4.368 billion. The Department increase in the state sales tax rate specifically desig- of Finance used a lower figure of $4.283 billion, nated for bond repayment. The flip went into effect which is the official figure that the Controller's Office July 1, 2004. According to the provisions of the must use for the calculations. The actual receipts measure, the county auditors are to receive the may come in at the higher rate, which would result in "official" estimate for each jurisdiction within the higher VLF receipts and revision to the total VLF in county by September 15 from the Department of lieu property tax base. Finance (DOF). The DOF recently provided the county auditors with those calculations and shared Second, the amount of administrative charges, the information with the League for distribution to which are deducted from the VLF funds available for cities. These calculations are available on the distribution, were estimated at $274 million and are League website www.cacities.ora in the related now set at $283 million as provided in the state resources section of the Revenue & Taxation page of budget. Issues & Advocacy. Finally, the enacting legislation made some CALCULATIONS. To calculate each jurisdiction's changes that were not included in earlier discussions flip amount, the DOF started with a total statewide of the local agreement: amount that was included in the 2004-05 State ... Budget based on prior year receipts plus an esti- 3 A distribution of $54 million to Orange mated growth factor. This statewide total was then County from the VLF to satisfy related debt obliga- divided among the counties proportionate to the tions. county's share of the total statewide Bradley-Bums sales tax in the previous year (this includes both city 3 Recently incorporated cities that receive a and county revenues). The calculations for each city "bumped" up share of VLF in the first seven years within each county and the county are based on each after incorporation will receive the amount of the jurisdiction's percentage of the total county receipts in additional "bump" from the VLF. The net effect is to the prior year. The county auditor will distribute to reduce their share of VLF in lieu property tax each city and the county one-half of the amount listed amounts to the base amount of all other cities. in the schedule in January and one-half in May. Differences between these estimates and the actual For these reasons, the "official" estimates are sales tax reductions will be made up in the following different from the earlier estimates that cities were year. using. The county auditors will distribute the swapped property tax amounts in two equal amounts THE VLF - PROPERTY TAX SWAP. The local in January and May. government agreement within the 2004-05 state budget included a provision that replaces Vehicle The League understands that the final piece of License Fee backfill and other shifts in the city and the property tax revenue puzzle, the ERAF III contri- county share of the vehicle license fees with property bution, will be available on the State Controller's tax revenues. In the future, the replacement property website within the week. Concurrently, the county tax revenues will grow at the same rate as assessed auditors are preparing guidelines for managing the property values. The "official" property tax-VLF swap distributions of the triple flip, VLF- property tax swap figures may be found on the State Controller's website and ERAF III. A working group of state and local at www.sco.ca.aov/ard/Davmentslmvlf/ officials, including city officials, have been meeting vlf adi amts.pdf. with the county auditors and will review the guide- lines before final publication. Once finalized it will be These calculations differ from the earlier esti- made available to interested city officials. mates that the League provided. There are some PAGE 6/PRIORITY FOCUS Visit the league's Official Web Site--www.cacities.org