Wednesday, December 20, 2006

Property tax query

The Economic Development Advisory Committee asked this question so I thought I'd post my answer here for anyone who is interested.

What % of property taxes goes to Fairfax?

Eighteen percent (18%) of a property’s basic property tax assessment goes to the Town of Fairfax. California Constitution Article XIIIA (Prop. 13) limits the property tax to a maximum 1 percent of assessed value. The assessed value of property is capped at the 1975–76 base year plus inflation — or 2 percent per year. Property that declines in value may be reassessed at the lower market value. Property is reassessed to current full value upon change in ownership (with certain exemptions).

Most property tax that you pay goes to finance the local public elementary, middle, and high schools and community colleges.

In Fairfax, we have some additional property-based assessments that not all other cities have, or some have differing variations of:

  • Pension override tax (has been in place since the 1960s, pre-Prop. 13): .0910% of assessed valuation.
  • Measure K bonds (approved by voters in 1999): .0416 of assessed valuation (will increase very slightly with the August 2006 sale of the last in the series of bonds.) The revenue is used for streets, drainage and infrastructure repairs.
  • General Purpose tax (has been in place since 1980s?): $50 per living unit or business occupancy. Can be used for any governmental purpose.
  • Special Purpose tax (Measure F 2005): $125 per living unit or business occupancy. Can only be used for specified purposes as approved by voters, i.e. police, fire, public works and youth program.

All of the above four taxes go exclusively to the Town of Fairfax.

As far as income tax is concerned, in case you are interested, less than 3% of Federal income tax makes it way to cities (most goes to federal defense spending and the national debt) and less than 1% of State income tax goes to cities (most goes to state colleges, health and human services, prisons, and the courts).