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MeetingtheChallengeTaskForce <br />ReviewofGeneralFundRevenueAlternatives <br />January22,2009 <br />LocalOptionPropertyTaxLevyʹNotRecommended <br />Description <br />Alocaloptionlevyisapropertytaxthatispaidbyallpropertyowners <br />withintheCitylimits.TheCitycouldimposealocaloptionlevyfor <br />capitalprojectsforupto10years,orforotherpurposesforamaximum <br />offiveyears. <br />MeetingtheChallengeLocaloptionlevyisnotrecommendedbecausebystatutethefundingis <br />Actionlimitedto5yearsforoperatingpurposes.Therevenuefromthelevyis <br />notongoingandshouldnotbeusedtopayforongoingexpenses. <br />LegalAuthority& <br />Neworadditionalpropertytaxesmustbeapprovedbyamajorityofthe <br />Restrictions <br />peoplevotinginaprimaryorgeneralelection. <br />Precedence <br />Propertytaxesareusedextensivelybylocalgovernmentsacrossthe <br />UnitedStates.TheCitycurrentlyimposesafouryearlocaloptionlevy, <br />forlibraryserviceimprovements.TheCityhasnotproposedanycapital <br />localoptionleviesinthepast. <br />RevenueYield&StabilityTofund$5,000,000ofoperatingcostswithafiveyearlocaloptionlevy, <br />theCitywouldhavetolevyapproximately$5,664,000peryear.The <br />typicalsinglefamilyhomewithataxableassessedvalueof$158,447 <br />wouldpayabout$0.49/$1000ofAV,or$77.67peryearoverthefive <br />yearperiod. <br />Localoptionleviesaresubjecttothe$10/$1000ofrealmarketvaluetax <br />ratecapforallgeneralgovernmentsunderMeasure5.UnderMeasure <br />50,localoptionleviesarethefirsttobereducedintheeventoftaxrate <br />compression.Thismeansthatifthecombinedtotalleviesforthe <br />overlappinggeneralgovernmentsexceedtheMeasure5cap,anylocal <br />optionlevieswouldbeproportionallyreduceduntilthetaxratelimitis <br />satisfied. <br />RevenueAdequacyAsubstantialportionoftheŝƚLJ͛Ɛrevenueneedscouldbemetinthe <br />shorttermviaalocaloptionlevyʹifpassedbyvoters. <br />Alocaloptionlevyisnotnecessarilyalongtermsolutionasfuture <br />fundingwouldbecontingentuponvotersrenewingthelevyinfuture <br />yearstocontinuetherevenuestream. <br />AdministrativeEffortPropertytaxesareadministeredbytheCounty.TheCountypreparesthe <br />taxbills,collectsthefunds,andremitstheappropriateamounttothe <br />Cityonaregularbasis.EnforcementisperformedbyboththeCounty <br />andtheCityintheforeclosureprocess. <br />TimelineAlocaloptionlevycouldbeplacedontheballotinMayof2010tobe <br />implementedinFY11. <br />Incidence&EquityThetaxispaidbyallpropertyownerswithinCitylimits.Propertyowners <br />includebusinessandresidences.Businessesmaychoosetopassthetax <br /> <br />