To: Board of Supervisors
Department or Agency Name(s): Auditor-Controller Treasurer-Tax Collector
Staff Name and Phone Number: Lindsay VanMidde (707) 565-3279
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
2022-23 Property Tax Administration Charge
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Recommended Action:
Recommended action
Approve Resolution Authorizing Property Tax Administration Charge to local taxing agencies to reimburse the County for costs incurred to process property taxes for FY 2022-23.
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Executive Summary:
During Fiscal Year 1990-91, the State Legislature gave Counties the authority, under Senate Bill 2557, to collect property tax administration costs from local taxing jurisdictions as reimbursement for processing their property taxes. This authorization was codified in Revenue and Taxation Code section 97 (now Revenue and Taxation Code section 95, et seq.). The purpose of this action is for the Auditor-Controller-Treasurer-Tax Collector (ACTTC) to report the charges for property tax administration in FY 2022-23 to the Board of Supervisors, taxing jurisdictions and other interested parties.
FY 2022-23 property tax administration charges total $11,620,096, which represents FY 2021-22 actual property tax administration costs net of offsetting revenue. Charges for special districts, cities and redevelopment successor agencies total $2,926,312, and will be collected by the ACTTC. School entities are exempt from property tax administration charges and, as a result, the remaining amount of $8,693,784 will be borne by the County General Fund. Amounts collected from taxing jurisdictions are programmed in the FY 2022-23 Adopted budget as County General Fund revenue in the Non-Departmental budget unit.
Discussion:
In accordance with the Revenue and Taxation Code Section 95, taxing jurisdictions will be charged in FY 2022-23 for the FY 2021-22 actual net cost of property tax administration provided by the ACTTC, Assessor, and Assessment Appeals Board. Attachment 1 to the attached Resolution provides a summary of FY 2021-22 actual property tax administration costs by department, offsetting revenue and net cost included in the FY 2022-23 charges.
The net cost of property tax administration is apportioned to taxing jurisdictions proportionally based on each jurisdiction’s share of the countywide property tax allocation adjusted for redevelopment tax increment. In 1991-92, the State Legislature exempted school entities from property tax administration charges and, as a result, the ACTTC will not charge county school districts, community college districts, Educational Revenue Augmentation Fund, and county offices of education for their proportional share of costs.
FY 2022-23 property tax administration charges total $11,620,096, which is a decrease of ($1,273,827), or (9.88%), from FY 2021-22, and total property tax administration charges of $11,620,096 is equivalent to 1.1% of the countywide property tax allocation. The year-over-year decrease is attributable to a $84,685, or 0.5%, increase in eligible property tax administration costs and a $1,358,512, or 47.4%, increase in offsetting revenue. The increase in eligible costs is primarily due to higher salaries and benefits costs. Offsetting revenue includes various property tax administration fees and reimbursements collected in accordance with State statutes. The increase in total offsetting revenue is primarily due to a $1,158,609, or 171.5%, increase in supplemental collection fees resulting from higher supplemental tax revenue collections.
Attachment 2 to the attached Resolution shows the FY 2022-23 distribution of property tax administration costs to each taxing jurisdiction and includes a comparison to the FY 2021-22 distribution. Special districts, cities and redevelopment successor agencies will be charged a total amount of $2,926,312 and the remaining amount of $8,693,784 will be borne by the County General Fund. School amounts are included as information only and, if not exempt, school entities would pay $6,596,194 and the County General Fund share would be reduced to $2,097,590.
Prior Board Actions:
October 23, 1990: First established a charge for Property Tax Administration. Each year thereafter annual approval of Property Tax Administration Charges.
Fiscal Summary
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Expenditures |
FY 22-23 Adopted |
FY23-24 Projected |
FY 24-25 Projected |
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Additional Appropriation Requested |
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Narrative Explanation of Fiscal Impacts:
In FY 2021-22, the Auditor-Controller-Treasurer-Tax Collector, Assessor and Assessment Appeals Board collectively incurred net costs of $11.6 million for the administration of property taxes. Of these costs, $2.9 million will be recovered through property tax administration charges. Property tax administration charges are recorded as revenue in the General Fund under the Non-Departmental budget unit and are collected from special districts, cities and redevelopment successor agencies. The remaining $8.7 million in costs are financed with discretionary County General Fund; $2.1 million represents the County’s share of tax administration, and $6.6 million is attributable to schools.
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Narrative Explanation of Staffing Impacts (If Required):
None.
Attachments:
Resolution Authorizing Property Tax Administrative Charge for 2022-2023
Related Items “On File” with the Clerk of the Board:
County Property Tax Administrative Costs (SB 2557) Guidelines from the California Property Tax Manual.