Item A: Measure 37 Givings Tax - Laserfiche WebLink

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determination. That evidence most likely would need to be in the form of appraisals from certified appraisers. Determining the amount of the tax will involve two sets of decisions: a policy decision by the council, and a set of administrative determinations. First, as with the “upzoning” tax, the council will need to determine the tax rate as part of the adoption of this type of tax. Presumably, the tax rate will be a percentage of the increase in fair market value. This rate could be structured a number of different ways. The simplest way to structure the rate would be as a straight percentage of any increase in value; for example, the tax could be 25% of the amount that the property increased in value. More complicated structures could include exempting a certain portion of the increase and taxing the remainder. In this latter alternative, the council could structure the tax as follows: determine the increase in value, deduct from that increase a percentage of the increase, and then impose a tax on the remainder (for example, 25%). Second, the City would need to determine which properties increased in value, and by how much. These determinations will need to be based on appraisals or other evidence of the fair market value of the property before and after the public improvement. The cost of these appraisals would need to be borne by the City. The cost of any appeal (to a hearings official, for example) also would be borne primarily by the City. Once these two sets of determinations have been made, the determination of the amount of tax actually owed would be a simple mathematical calculation. What is the anticipated cost of administration (and what are the things that would make it high or low)? The costs to the City in administering this type of tax would be in medium category as compared to the other three options. Unlike the “upzoning” tax, the City would need to determine the universe of people subject to this “local investment” tax for each public improvement, and then would need to determine the amount of increase for each of those properties. The amount that any particular property increased in value would not necessarily be the same for all of the properties. In order to make those determinations, the City will need to pay for appraisals. As noted previously, the cost of such an appraisal could range anywhere from a few thousand dollars to $10,000 or more – particularly since two values would be needed (the “before” and the “after”). In addition, where the City and property owner disagreed as to value, the City would need to defend its determination in front of a hearings official, and possibly in court. Has the property owner paid (or will the property owner owe) other assessments, taxes or fees in connection with the same triggering action? Measure 50 allows assessed value (and therefore property taxes) to be increased under certain circumstances, such as for additions or improvements, partitions, subdivisions, rezoning where the property is used consistently with the rezoning, lot line adjustment, or the property is dis- L:\CMO\2006 Council Agendas\M060125\S060125A.doc