The Morning Report
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I got some questions this weekend about what time period we were talking about in Friday’s post about the historic property tax dip for San Diego County. I’ll try to make it clearer:
The County Assessor’s Office is expecting a 2.5 percent drop in the value of the tax rolls it is currently tabulating. That refers to the values for all properties in the county for the 2008 calendar year. The 2.5 percent drop is compared to the total for the calendar year 2007.
(Between 2006 and 2007, the total value grew 4.6 percent.)
The county uses the assessed value number to set taxes for the next year and project the growth or shortfalls in the revenue that comes in. So the county will take the 2.5 percent year-over-year decline in assessed value, and use it to inform projections for the county’s fiscal year 2009-2010, which begins in July.
The County Assessor’s Office’s first projections for the current fiscal year showed an expected 2 percent positive growth for assessed value. Later, seeing so many requests for property tax reductions because of the slumping market, plus a major slowdown in new construction, the office revised its projection to 0.5 percent positive.
But the numbers have been revised again; that’s where we get the negative-2.5 percent projection that David Butler, county assessor, told me about Friday.
I checked in today with Don Steuer, the county’s chief financial officer, to get his take on how the drop will impact the county government’s coffers. Property taxes make up most of one of the streams into the county’s general fund, its day-to-day account.
The effect of a year-over-year decline of 2.5 percent in assessed value is a loss about of $64 million in general purpose revenue for the county — about 6.3 percent of that stream, he said.
This is just one of the streams affected by the economic downturn. Add the drop in property tax collection to two others — sales taxes and vehicle license fees — and the county is down $142 million year-over-year, Steuer said.
The county faces big cuts in order to bridge that gap, Union-Tribune reporter Jeff McDonald reported today:
In one fell swoop this week, county supervisors are expected to eliminate more than 770 positions, cut $400 million from a projected budget and try to steer more public services to the private sector.
The shortfall will hit all governments. The Assessor’s Office expects to have preliminary projections for the county’s cities late this week. Butler said this afternoon there will likely only be a handful of cities in the county — maybe fewer than five — that will pull in a positive property tax revenue stream this year.