AuditorControllerTreasurerTax Collector Disbursements Division Property Tax Overview Linda
Auditor-Controller/Treasurer/Tax Collector Disbursements Division Property Tax Overview Linda Santillano Property Tax Manager October 2, 2016 www. SBCounty. gov
Property Tax Overview Page 2 Presentation Objectives: § Background of Proposition 13 and its effect on property taxes. § Property Tax functions by County Departments § Overview of Property Tax Bills § Overview on how Property Taxes are Allocated Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Taxes Before Proposition 13 Page 3 § Local jurisdictions had authorization to set their own tax rate on an annual basis. § Rate was driven by the amount of revenue needed to finance the desired level of service. § Rate was independent of other jurisdictions. § The sum of all rates for each taxing entity was applied on tax bills. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Taxes Before Proposition 13 Page 4 § San Bernardino County property tax rate was 2. 84 percent in FY 1977 -78 § Average statewide property tax rate was 2. 67 percent § Statewide property tax revenue was approximately $10. 3 billion and represented 57% of combined city and county general purpose revenues. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Taxes Post Proposition 13 Page 5 Proposition 13 was passed by voters on June 6, 1978 by a vote of 65% to 35%. • Transferred control over property tax allocations to the state. • Prop. 13 limited the property tax rate to 1% of assessed value, exclusive of bonded indebtedness approved by the voters. • Annual assessed value adjustments were limited to the lesser of the increase in the CA Consumer Price index or two percent. Resulted in a reduction of $7 billion in statewide property taxes in the first year of implementation. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Taxes Post Proposition 13 Page 6 In an effort to mitigate the fiscal distress local governments were facing and to implement an allocation process the legislature approved a series of legislation. § Senate Bill 154 (SB 154) June 1978 • Allocated property taxes at the 1% based on the share of property taxes taxing entities received prior to Prop. 13 and • Provided state assistance / “bailout” block grant. § Assembly Bill 8 (AB 8) 1979 • Established the property tax allocation system. • Established ongoing “bailout” for local governments. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Functions of Property Tax Departments Page 7 Property Taxes § San Bernardino County levies, receives and apportions approximately $2. 8 billion in property tax revenues and direct charges annually. § Four departments share the property tax responsibilities: 1. 2. 3. 4. Assessor-Recorder-Clerk Tax Collector Auditor-Controller Assessment Appeals Board (Clerk of the Board) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Process Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 8 www. SBCounty. gov
Assessor Responsibilities Page 9 § The Assessor is responsible for: • Maintaining inventory of assessable property • Maintaining ownership and location information • Determines Valuation § § Real property Personal property • • • § Records exemptions (if owner is eligible) • Auditor-Controller/Treasurer/Tax Collector Disbursements Division Business property Manufactured housing Boats, airplanes Homeowner’s Exemption www. SBCounty. gov
Assessor Responsibilities Page 10 The County Assessor is responsible for submitting the local roll to the County Auditor-Controller on or before July 1 st. The local roll consists of: • Secured roll – property valuations on which the lien date, January 1 st, is sufficient to secure the payment of taxes. (land, mineral rights, improvements, personal property, trade fixtures and exemptions) • Unsecured roll – valuations are comprised of improvements, business trade fixtures, business personal property, boats. The CA Board of Equalization (BOE) is responsible for submitting the Utility roll on or before July 31 st. • Comprised of unitary and nonunitary values; examples of nonunitary are railroad property and property owned by a state assessed utility company. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Auditor-Controller Responsibilities Page 11 § The Auditor-Controller is responsible for: • Calculating and applying tax rate(s) for levying agencies by TRA • Applying direct charges Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Auditor-Controller Responsibilities Page 12 Upon receipt of the secured roll from the Assessor and the utility roll from the Board of Equalization, the values are loaded into the property tax system and reconciled before proceeding with the tax rate calculations. Tax Rate Calculations Agencies are provided with valuations and applicable deadlines on an annual basis. The rates can be calculated / applied as follows: 1. The levying agency can submit the rate along with a Board approved resolution to the Auditor-Controller. (estimated revenue is calculated) 2. Agencies or Agent can submit bond levy requirements for the fiscal year and have the Auditor-Controller calculate the rate. (rate and estimated revenue is calculated) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Auditor-Controller Calculated Tax Rate Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 13 www. SBCounty. gov
Auditor-Controller Calculated Tax Rate Auditor-Controller/Treasurer/Tax Collector Disbursements Division (continued) Page 14 www. SBCounty. gov
Board Approved Tax Rates Page 15 • Government Code Section 29100 requires the Board of Supervisors to adopt the rates being applied to the secured roll on or before October 3 of each year. • County Auditor-Controller presents the BAI on the first Board meeting in September in order to extend the tax charge to the Tax Collector no later than the third week in September. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Board Approved Tax Rates Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 16 www. SBCounty. gov
Auditor-Controller Responsibilities Page 17 Applying Special Assessments or Direct Charges to the Tax Roll § A Special Assessment or direct charge is a non ad valorem amount levied on a per parcel basis which may include charges for services, improvement district charges, community facilities district (Mello-Roos), special taxes and fees. § Agency must agree and guarantee that the taxes, fees, or assessments that are being applied are in compliance with all requirements of state law, including but not limited to, Articles XIIC and XIID of the CA constitution (Proposition 218) and other applicable laws that allow the placement on the tax bill. Important deadlines § July 1 – Preliminary notification must be submitted by agency § August 10 – Submissions are due § September 5 – Last day to submit corrections Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Auditor-Controller Responsibilities Page 18 The Auditor-Controller extends the secured roll and tax charge to the Tax Collector to bill and collect. The secured tax charge includes : 1. Local secured roll charges $1, 999, 912, 328. 40 Secured Tax Charge 255, 300, 053. 59 Direct Charges $2, 255, 212, 381. 99 Total 2. State Utility Charge Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Tax Collector Responsibilities Page 19 § The Tax Collector is responsible for: • Printing and mailing of tax bills • Collecting tax revenue § § 1% general tax levy Debt service overrides Direct charges Penalties and interest • Recording taxes received by parcel • Conducting tax sales on eligible properties Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Tax Collector Responsibilities § § Page 20 Unsecured tax bills are mailed on or before July 31 Secured tax bills are mailed before November Supplemental tax bills are mailed out in January, May and August. Important dates to remember: • August 31 – Unsecured tax bills payment deadline. A 10% penalty is added plus a $76 collection fee if the bill is not paid timely. • October 31 – Unsecured tax bills in default if not paid by 5 pm and a penalty of 1 -1/2% is added per month on unpaid amounts. • December 10 – Secured tax bill first installment payment deadline. • April 10 – Secured tax bill second installment payment deadline. • June 30 – Delinquent Secured accounts are transferred to delinquent tax roll and additional penalties 1 -1/2% per month on unpaid amounts and $15 redemption fee are added. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Auditor-Controller Distribution Responsibilities Page 21 § The Auditor-Controller is responsible for: • Distribution of 1% ad valorem property tax to local agencies. • Distribution of debt override revenue and direct charge revenue to agencies. Notice that contact information for the levying agency is provided on bills. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Calculation of Tax Bill Amount Parcel Number 0283 -215 -16 -0000 Description Land Improvements/Fixtures Homeowner's Exemption Net Value (Total Net Value) Tax Rate Area 13010 Page 22 Total Tax Rate 0. 012595 Assessed 56, 387. 00 131, 568. 00 (7, 000. 00) 180, 955. 00 Service Agency General Tax Levy Loma Linda Vector Control Street Light Benefit AD 1 San Bndo Comm College Bond School Bonds Redlands Unified Bond School State Repayment San Bndo Valley Muni Water Debt Service Tax Rate Applied to Value Amount 1. 0000% 180, 955. 00 per parcel charge 0. 0403% 180, 955. 00 0. 0567% 180, 955. 00 0. 1625% 180, 955. 00 Total Tax Rate 1. 2595% Auditor-Controller/Treasurer/Tax Collector Disbursements Division Amount 1, 809. 55 5. 62 38. 00 72. 92 - 102. 60 - 294. 05 Total Taxes Due 2, 322. 74 www. SBCounty. gov
Calculation of Tax Bill Amount Parcel Number 0183 -561 -45 -0000 Description Land Improvements/Fixtures Homeowner's Exemption Net Value (w/ L& I Rate) Tax Rate Area 9006 Page 23 Total Tax Rate 0. 010329 Assessed 6, 520. 00 41, 340. 00 (7, 000. 00) 40, 860. 00 Service Agency General Tax Levy Barstow City - Debt Service Barstow Unified Bond School Bonds School State Repayment Odessa Water Debt Service Mojave Water Bond Debt #2 Mojave Water Bond Debt #1 Tax Rate Applied to Value Amount 1. 0000% 40, 860. 00 0. 0329% 40, 860. 00 0. 0550% 47, 860. 00 (Land + Imp) 0. 1125% 6, 520. 00 (Land only) Total Tax Rate 1. 0329% Auditor-Controller/Treasurer/Tax Collector Disbursements Division Amount 408. 60 13. 44 - 26. 32 7. 33 Total Taxes Due 455. 69 www. SBCounty. gov
Auditor-Controller Responsibilities Page 24 § The Auditor-Controller conducts approximately twenty property tax apportionments on an annual basis including: • Homeowner’s Exemption Reimbursements • RDA Dissolution / RPTTF distributions • FYE Teeter Plan Reconciliation § An apportionment schedule is prepared and provided to local taxing entities for cash flow planning purposes. § Prepares reports for corresponding apportionments. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Apportionment Schedule Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 25 www. SBCounty. gov
Property Tax Apportionment Process Page 26 The Auditor-Controller apportions taxes to local taxing entities utilizing the AB 8 formula below: + Amount received in prior year (base year) + Annual growth for their boundaries +/- Tax Transfers for Jurisdictional Changes +/- Tax Equity Allocation (TEA – No/Low Tax Cities) - ERAF Contributions (if applicable) = Total amount per taxing entity / Divided by total for all taxing entities within County = AB 8 Factor* *1% GTL collections, less RDA increment, less refunds, multiplied by the AB 8 factor is the apportionment amount. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process AB 8 Factor Calculation Process Page 27 - Step 1 1. Record prior year revenue / base year values. 2. Valuation reports must be loaded to the system and reconciled. • Valuations are recorded by the Tax Rate Area (TRA) • Base year (prior year) valuations are loaded into the system for the new roll year and reconciled to the prior year AB 8 report (PI 739 E 04 report – allocation percentage report) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process Page 28 AB 8 Factor Calculation Process - Step 1 (PY Values/Revenue) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process AB 8 Factor Calculation Process Page 29 - Step 2 1. Calculate the annual growth. Growth is defined to be: Current Year Equalized Roll AV (net of RDA Value) - Prior Year Equalized Roll AV (net of RDA Value) = Annual Growth (or value increment) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 30 www. SBCounty. gov
Property Tax Apportionments / AB 8 Process AB 8 Factor Calculation Process Page 31 - Step 3 1. Apply Tax Transfers for Jurisdictional Changes • In order to calculate growth (increment) correctly, we must align the base year values by TRA with the new year TRA’s added / deleted in the current year. • Tax transfers are negotiated through the LAFCO process for the proposed annexation /detachment by the affected taxing entities. • Board of Equalization (BOE) provides “Tax Rate Area Change Notices” on an annual basis instructing the Auditor-Controller what actions need to be applied to TRAs and taxing entities. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process Page 32 AB 8 Factor Calculation Process - Step 3 continued Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process AB 8 Factor Calculation Process Page 33 - Step 4 1. Tax Equity Allocations (TEA) (No/Low Cities) • Legislation requires counties to shift property tax revenues to certain cities if they meet the following criteria: § § § No Cities – Levied no tax rate in 1975 -76, 1976 -77 or 1977– 78. Low Cities – receive less than 7% of the total taxes within the city for all jurisdictions. Revenue and Taxation Code Section 97, 97. 5, 98 and 98. 6 2. Two cities in San Bernardino County were determined to be a qualifying cities in 1988 -89; Rancho Cucamonga and Victorville. • The TEA calculation is performed on an annual basis to determine if a TEA allocation is required. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process Page 34 AB 8 Factor Calculation Process - Step 5 ERAF Contributions What is ERAF? § ERAF is the Educational Revenue Augmentation Fund § Established by the state to resolve a budget deficit § In 1992/93 (ERAF I) and 1993/94 (ERAF II) the State legislature permanently shifted over $3 billion of annual AB 8 property tax revenues from local taxing entities. § ERAF I and II are components of the AB 8 revenue and should be considered for jurisdictional changes, TEA, unitary, etc. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Apportionments / AB 8 Process AB 8 Factor Calculation Process Page 35 - Step 6 The sum of steps 1 thru 5 equal the total amount per taxing entity Total amount per taxing entity divided by the total for all taxing entities within County = AB 8 factor. ($1, 020, 572. 07 / 1, 309, 305, 667. 32 = 0. 077947 for the City of Loma Linda) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Example Tax Bill Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 36 www. SBCounty. gov
Property Tax Apportionments Page 37 TRA 13010 projected share for AB 8 factors Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax – Supplemental Property Taxes Page 38 The Supplemental Roll and Tax Charges are extended in January, May and August. § Supplemental bills are a result of reassessments of real property based on the date of event for: • Changes in ownership • New construction § The supplemental factors are the same as the AB 8 factors for most agencies. § The AB 8 factors are modified to create supplemental factors for K-12 schools pursuant to R&T Code Section 75. 70(c)(6). Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax – Supplemental Property Taxes Page 39 § The CA Dept. of Education provides the Average Daily Attendance (ADA) factors for K-12 schools on an annual basis to the County Auditor-Controller to calculate the supplemental factors. § ADA and supplemental factors for basic aid schools is zero pursuant to R&T Code Section 75. 70(d)(2) § San Bernardino County currently has two K-12 districts identified as basic aid: • Cucamonga Elementary • Baker Unified School District Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Average Daily Attendance Supplemental Factors Auditor-Controller/Treasurer/Tax Collector Disbursements Division Page 40 www. SBCounty. gov
RDA Tax Increment / RPTTF Apportionments Page 41 Property Taxes are apportioned to Redevelopment Agencies (RDAs) outside of the AB 8 factors and are disbursed in accordance with RDA Dissolution legislation ABX 1 26, AB 1484 and SB 107. • RDAs receive the tax increment above the frozen base. • The tax increment revenue is held in the Redevelopment Property Tax Trust Fund (RPTTF) and disbursed twice a year on January 2 and June 1 • The County Auditor-Controller is the administrator for all the RPTTF funds and is responsible for all pass-through calculations and the oversight of several wind-down activities. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
RDA Tax Increment / RPTTF Apportionments Page 42 The RPTTF apportionments are disbursed in the following order of priority: 1. Auditor-Controller administration cost 2. Pass-through payments to affected taxing entities 3. Payment to the RDA Successor Agency for approved items on the Recognized Obligation Payment Schedule (ROPS) • • Tax Allocation Bonds Revenue Bonds Other Enforceable Obligations Successor Agency Administration Cost 4. Residual payments to affected taxing entities. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Oversight – SCO Audits Page 43 Senate Bill 418 was enacted in 1985 requiring the State Controller to audit the counties’ apportionment and allocation methods and report the results to the California State Legislature. § Audit objective – review the County’s apportionment and allocation of property tax revenue to local taxing entities, including schools within its jurisdiction to determine if the county complied with Revenue and Taxation requirements. § Extensive review and testing is conducted by SCO on the AB 8 factor computation and apportionments. Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Distribution WHERE DID YOUR PROPERTY TAX DOLLARS GO IN FY 2014 -15? County Library 0. 59% County Government 10. 22% School Districts 40. 92% Special Districts 9. 36% RDA Increment 29. 80% Page 44 RDA INCREMENT DISTRIBUTION Cities & Subsidiaries 1. 60% Successor Agency 12. 44% School Districts 9. 05% Special Districts County 4. 27% Government 3. 17% Cities & Subsidiaries 9. 10% Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Distribution Page 45 WHERE DID YOUR PROPERTY TAX DOLLARS GO IN FY 2014 -15? County Library 0. 76% County Government 13. 75% Special Districts 13. 36% RDA Successor Agencies 11. 71% Cities & Subsidiaries 10. 66% School Districts 49. 76% Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Distribution Page 46 $2. 842 BILLION $254 MILLION TO DEBT SERVICE $1. 763 BILLION TO GENERAL TAX LEVY Auditor-Controller/Treasurer/Tax Collector Disbursements Division $581 MILLION TO RDA RPTTF $243 MILLION TO DIRECT CHARGES www. SBCounty. gov
Taxes Allocated Over 10 Year Period Page 47 Millions Taxes Allocated and Apportioned by Year 3, 500 3, 000 2, 500 2, 000 1, 500 1, 000 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 Total (in Millions) Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Assessment Roll Historical Trends Page 48 County of San Bernardino Assessment Rolls Roll Year 2005 -2015 Billions 200 190 180 170 160 150 140 130 120 110 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TOTAL in BILLIONS Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Overview Page 49 Questions? Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
Property Tax Overview Page 50 Sources: § California State Association of County Auditors – California Property Tax Managers’ Reference Manual § Demystifying the CA Property Tax Apportionment System – “A Step -by Step Guide through the AB 8 Process” § Understanding California’s Property Taxes www. lao. ca. gov § “Property Taxes: Why Some Local Governments Get More Than Others” www. lao. ca. gov § Property Taxes Law Guide www. boe. ca. gov § Pam Elias, Riverside County Property Tax Division Chief Auditor-Controller/Treasurer/Tax Collector Disbursements Division www. SBCounty. gov
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