The Governor has signed into law Senate Bill 85, authored by Senator Dave Cogdill (R-Modesto) and coauthored by Senator Jeff Denham (R-Merced). SB 85 will help bring equity to property tax allocations for rural counties.
To help counties offset local revenue losses from the passage of Proposition 13, the state in 1978 increased General Fund support at the local level for education, which helped increase funding for 52 counties. But six counties, Alpine, Lassen, Mariposa, Plumas, Stanislaus, and Trinity actually lose money each year due to this funding shift.
Senate Bill 85 would cap the amount of collections that the county must transfer to local schools for the next two years and then create a baseline for future years to save counties hundreds of thousands of dollars annually.
“I applaud the Governor for signing this law to help our rural counties get their fair share of property tax dollars. This legislation will help counties put more locally-generated tax dollars to work closer to home,” said Senator Cogdill.
The inequity in property tax distribution has been estimated to have taken $40 to $50 million from Stanislaus County during the past decades. Stanislaus County will receive upwards of $200,000 a year for two years in a best case estimate. The worst case estimate is that Stanislaus County is guaranteed not to lose money. These dollars will be added to the approximate $150 million of discretionary revenue expected by Stanislaus County. The Stanislaus County General Fund budget totals nearly $250 million.
“This is a fairness measure designed to correct an injustice that has continued to plague six counties for over two decades,” said Denham, a coauthor of the bill. “At no fault of their own, these counties are paying the price for an out-of-date state accounting formula.”
Stanislaus County is close to the bottom of the list out of the 58 counties in California when it comes to receiving their share of property taxes collected from their area. Stanislaus County receives 11 cents of every property tax dollar collected in the county while the average is at 19 cents; San Francisco receives 25 cents back from every property tax dollar collected in their area.
When Prop 13 was passed in 1970’s these percentages may have been computed according to how some counties, such as Stanislaus County, were in good fiscal shape while others needed more help.
SB 85, and Denham’s previous bills that were not passed, were introduced at the request and with the cooperation of Stanislaus County officials.
“We are very appreciative of their efforts in this certain area of unfairness,” said Stanislaus County District 2 Supervisor Vito Chiesa. “Stanislaus County continues to look toward a permanent fix to the inequity of property tax our county receives back from the state.”