Item C: Measure 37 Givings Tax - Laserfiche WebLink

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When a rezoning or change in designation application is submitted, the land’s typical real market ? value under the old zone or plan designation will be compared with the land’s typical value under the new zone or designation, based on Lane County Assessment and Taxation typical land value per acre for that zone or designation. Values of improvements are excluded from this calculation. The City would avoid the costs of individual property appraisals under this assumption. Property owners could be given the option of accepting the City-determined value (as noted in the ? prior paragraph), or could obtain (at their own cost) an appraisal. If the property owner gets an appraisal, the City could then accept that appraisal or obtain its own. The tax rate is assumed to be a flat percentage applied to the estimated change in real market value. ? The actual rate structure to be imposed will be determined by the council. About 25 citizen-initiated rezoning or change in plan designation applications are normally submitted each year, though this number varies and has been as high as 50 in recent years. In 2005, under the assumptions noted above, the estimated change in real market value of land for applications submitted was about $2.25 million. The average change in real market value was about $9,000 per property, though this ranged from a low of $300 to a high of $39,000 for individual properties. Under these assumptions, in 2005, each 5 % increment in the tax rate would have generated estimated gross revenues of about $113,000. With one possible exception, nearly all of that would be available for appropriation because administration of the tax would be fairly simple and administrative costs would be low. The one exception is that some additional resources may be required if a property owner submits his or her own appraisal (rather than relying on median values); if such an appraisal is submitted, it will need to be evaluated and then the City may need to obtain its own. Other than that appraisal issue, no additional FTE is expected to be required and administrative expenses are expected to remain low after modest setup costs. However if the tax were not made a condition of approval of the rezoning or change in plan designation, a billing, collection and enforcement process might have to be established. If appraisals were required to establish change in real market value on a property by property basis, rather than using typical real market values by zone, the costs would likely be higher by an average of several thousand dollars per property. If value of improvements were included in the basis for the tax, individual appraisals would be required and costs would be higher, and there is no certainty that change in real market value and resulting the gross revenue would be significantly higher. Focused Decisions - If the council chooses to more forward with this option, the following focused decisions will provide direction to staff for development of a draft ordinance: 1.Should only citizen-initiated rezoning or change in designation applications for property within the city would be subject to the tax, excluding City-initiated actions? 2.Should the tax be collected as a condition of approval of a rezoning or change in designation application, or should the tax be collected separately from the rezoning or change in designation process, requiring a separate tracking, billing, collection and enforcement process? 3.Should change in real market value of land be estimated using typical per acre values calculated from Lane County Assessment and Taxation data for all property within each zone citywide, or should the value be determined with property by property appraisals? 4.Should change in value of improvements be included with change in value of land to determine the basis for the tax, necessitating property by property appraisals? 5.Should the tax rate be a flat percentage applied to the estimated change in real market value for all rezonings or changes in plan designation, or should another rate structure (stepped, discounted, by L:\CMO\2006 Council Agendas\M060522\S060522C.doc