So how does this historic drop in property taxes impact an individual city?
I checked in today with Maria Kachadoorian, director of finance in Chula Vista, to see what that city is expecting. You’ll remember the city has already been facing a growing deficit and has cut aggressively its workforce and expenses to deal with it. A one-cent sales tax to try to bridge the gap was just resoundingly defeated with 68 percent of the vote in a special election.
Kachadoorian said more than in other years, the city has worked very closely with the assessor to try to keep track of foreclosures and of how many of its homeowners have requested reductions in their property tax bills because of falling values.
The Assessor’s Office was already expecting Chula Vista to “go backwards,” she said. Its first projection was that the city’s assessed value for all properties would be down about 4 percent from the previous year.
But a few weeks ago, the office revised that projection to negative 7 percent, potentially as bad as negative 8 percent, she said.
Because another revenue source, vehicle license fees, are also calculated according to a city’s assessed value, the additional drop could mean a $1.9 million loss in revenue.
She said her office has identified some revenues to offset the loss — including calling in some loans that had been made to the city redevelopment agency from the general fund. That should be enough to offset the loss without any further cuts than the city was already expecting, she said.
She said the strategy now is to cut severely to try to create some cushion for growth in the future.
“We really are trying to get ahead,” she said. “What we have now is conservative budget going forward, but that being said, clearly we’ll have to keep monitoring the housing market and see what happens.”
Kachadoorian hopes this is the worst year, and that the city can at least have a period where its revenues are not falling any further.
“I’ll be happy if we don’t go backwards,” she said. “Even if we have zero growth or 1 percent growth at least we’ve stabilized.”
We’ll keep you posted as the official projections are released later this week. The city of San Diego will include its projections of property tax revenue in its revised budget, due out Monday.
Chula Vista and the other cities in the county are readying their mid-year budgets right now. By Friday, the assessor will send them preliminary projections for how much growth or decline the cities can anticipate from assessed property values by Friday.