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HomeMy WebLinkAboutAgenda Report - August 3, 2016 Comments by the PublicCouncil Member Johnson made a motion, second by Council Member Mounce, to adopt Resolution No. 2016-151 authorizing the City Manager to execute Addendum No. 2 to Improvement Deferral Agreement for 1230 South Central Avenue. VOTE: The above motion carried by the following vote: Ayes: Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Kuehne, and Mayor Chandler Noes: - None Absent: Council Member Nakanishi C-6 Adopted Resolution No. 2016-148 authorizing the City Manager to execute Supplement No. 1 to Amended and Restated Northern California Power Agency Joint Powers Agreement, adding City of Shasta Lake as a Party. C-7 Adopt &golglon6pproving City of Lodi Storm Water Enforcement Re§Qonse Plan.and AdrniniLhgg PenaltySghedule Adopted Resolution No. 2016-149 approving the City of Lodi Storm Water Enforcement Response Plan and Administrative Penalty Schedule. C-8 R ive Re rt . a in Com an Pertainin o m I Bill 258 0 Parking {CL_ ICl Received report regarding communication pertaining to Assembly Bill 2586 (Gatto) - Parking. C-9 Adont Resolution Amtlkorizina City Manager to Execute. Amendment to Agreement with Adopted Resolution No. 2016-150 authorizing the City Manager to execute an amendment to the agreement with DSA Technologies for the purchase of network switches for fiber optic network from DSA Technologies, of Elk Grove, in the amount of $67,595.76. A is @n jemeMe_nay and e a ri on that emergengy arose after this acenda as ousted (Government Code S 954.2 b 2 . all o1her Items mag ly- referredfar review to staff or garment on a future Council agenda. Alex Aliferis provided information (filed) regarding property taxes, specifically the history of Proposition 13, the consequences of a split roll property tax, and how Proposition 13 works. He stated the split roll property tax will increase taxes on businesses by $6 billion and will cost jobs, adding that many associations are against the eroding of Proposition 13. E. Comments by the City Council Members -on- Nan -Agenda ii�ems Council Member Mounce reported that many of the citizens on the FaceBook group against Lodi Electric Utility are once again concerned about their high utility bills, stating that one individual received a $960 bill for her small house. She believed there was more work to do in this regard and questioned if the City has an additional source to test meters to ensure they are reading the CALIFORIIZIIANS TO STOP HIGHER PROPERTY TAns ranifflog"e b The fffistory of Prop 13 California Business Properties Association In 1978 the property tax pate throughout California.averaged almost 3% of market value, with no limits Total Education Speaging on increases eitlher for the.tax.rate. or propert.. V440. W-Mments. Owners' tax liills.skyrocketed, often California Business beyond the homeowners' ability to pay. Seniors, homeowners, small businesses and commercial.property Roundtable owners were faced with.the real. possibility-oflosing their homes and properties: because they couldn't California Chamber of afford 50-100% increases in their property taxes. Commerce 34.56% California Taxpayers Proposition 13 was put on the ballot in November of 1978 to stop these out of control increases by Association limiting property tax renes, increases and reassessnrtex'its. Howard Jarvis Taxpayers Association • Approved by two-thirds of California voters. ® Reduced property taxes by about 57%. Small Business Action 6 Set at a uniform 1% property tax rate, and limited increases to no more than 2% a year. Committee i Establishes property valuation at its purchase price. National Federation of a Provided stability to the increasingly volatile tax structure in California. Independent . Provides certainty to property owners to budget for their future and gave them protection from Business/California the runaway property taxes that would have forced many to sell their homes or lose their California Restaurant Association businesses. • Equally protects all property owners ranging from seniors and homeowners to small businesses. Central Coast Taxpayers Association Need for Property Tax Protections Contra Costa Taxpayers if Prop, 13 liad.not been appy y niers in 19'78; similar tax -rate Protections would have approved b v l�POrtY I? Asseciatiqu been needed and established in at least two other real estate bubbles wher- `small businesses an Orange County Business homeowners would have felt a similar.pinch inthe late 108W:=4 mid -2000s,: natead, Prop 13 was in Council place daring these bubbles protecting property owners from dramidle tax increases and local fxam wild revenue increases and decreases that would have decimated local programs and California Taxpayer governrnents Protection Committee resources. San Diego Tax Fighters Ensures Adequate School Funding Building Owners and Managers Association Proposition 13 didnothingto obange hose school Uds were allocated. Instead., itwas the California of California Supreme Court in Seo vs. Priest, an equal -protection case,. which. said revenues must be more Orange County equitably. distributed among school districts. Taxpayers Association ' International Council of According to the California Department of Finance, total education funding has grown dramatically and Shopping Centers increased even with Proposition 13 in place. Retail Industry Leaders Year Total Education Speaging &UD Association 1977-1978 $5.1 Billion 26.65% California Association 1978-1979 $7.9 Billion 34.56% of Realtors 2013-2014 $57.1 Billion 42.01% California Apartment Association Additionally, increasing property taxes does not increase the Proposition 98 education funding guarantee, providing no assurance that more tax dollars would make it to the classroom. *Partial list Paid for by Californians to Stop Higher Property Taxes 1215 K Street, 42260 1 Sacramento, CA 95814 1916-498-8322 www.StopHigherPropertyTaxes.org CALIFORNIANS TO STOP HIGHER PROPERTY TAXES Coalition Members The Consequences of a Split Roll California Business Recent reports indicate a renewed interest by the spending lobby in increasing property taxes on non - Properties Association homeowners. This aggressive tax increase would have a devastating impact on California's economy. California Business Roundtable Dramatic Tax Increase California Chamber of A split roll property tax will increase property taxes on businesses by an estimated $6 billion, according to Commerce a recent Pepperdine Study. California Taxpayers Association Howard Jarvis Taxpayers Association Small Business Action Committee National Federation of Independent Business/California California Restaurant Association Central Coast Taxpayers Association Significant Economic Harm a The cost to the California economy of this property tax increase would total $71.8 billion of lost output and 396,345 lost jobs over the first five years of a split roll property tax scheme. ■ The losses to California's economy would be even greater in succeeding years. Damaging to Small, Women and Minority Owned Businesses A split roll property tax would further damage California's already difficult business climate. Increased property taxes damage small business property owners and tenants alike. Because small businesses typically lease properties where the cost of property taxes is passed through to the tenant, employment losses would be disproportionately concentrated in small businesses, and especially those owned by women and minorities. Contra Costa Taxpayers Case Study Association Orange County Business Council California Taxpayer Protection Committee San Diego Tax Fighters Building Owners and Managers Association of California Orange County Taxpayers Association International Council of Shopping Centers Retail Industry Leaders Association California Association of Realtors California Apartment Association *Partial list Under Prop. 13 Under Split Roll System Gross Receipts $300,000 Gross Receipts $300,000 Business Expenses (All business expenses except property tax.) -$225,000 Business Expenses (All business expenses except property tax. -$225,000 Property Tax -$7,500 Property Tax (1% to 2% rate) -$15,000 Net Business Income Pass thru to individual) $67,000 Net Business Income (Pass thru to individual) $60,000 State/Fed Income Tax (20%)* -$13,500 State/Fed Income Tax (20%)* -$12,000 Net Individual Income $54,000 1 Net Individual Income $48,000 The business owner takes home $6,000 less per year under a Split Roll System (an 11 % reduction in net income). The other alternative is that the business owner reduces overhead by some amount to keep the income steady. For instance, a $7,500 reduction in expenses equates to 937.5 hours of work for minimum wage employees. *For demonstration purposes — could be more or less depending on deductions, dependents, etc. Detrimental to Local Government Finances The introduction of a split roll property tax would result in increased instability for local government finances, as they would become more directly susceptible to the historic bubbles in the California real estate market. Paid for by Californians to Stop Higher Property Taxes 1215 K Street, #2260 1 Sacramento, CA 95814 1916-498-8322 www.StopHigherPropertyTaxes.org CALIFORNIANS TO STOP HIGHER PROPERTY TAXES Coalition Members How Prop 13 Works California Business Properties Association California Business Roundtable California Chamber of Commerce California Taxpayers Association Howard Jarvis Taxpayers Association Small Business Action Committee National Federation of Independent Business/California California Restaurant Association Central Coast Taxpayers Association Contra Costa Taxpayers Association Orange County Business Council California Taxpayer Protection Committee San Diego Tax Fighters. Building Owners and Managers Association of California Orange County Taxpayers Association International Council of Shopping Centers Retail Industry Leaders Association California Association of Realtors Passed in 1978 by 65% of voters, in response to out of control property tax increases, Proposition 13: • Sets the property tax rate at 1 % of assessed value. • Restricts annual increases of assessed value to not exceed 2% per year. • Establishes property value for tax purposes at its purchase price and requires reassessment upon its change of ownership. • Requires that local special tax increases be approved by voters with a two-thirds vote, including parcel taxes. • Requires that state tax increases be approved by a two-thirds vote of each house of the Legislature. According to the latest PPIC poll in December 2012, Proposition 13 remains highly popular among likely voters, with 64% support. State's Largest Revenue Source • Property tax is already California's largest revenue source. • According to the California Legislative Analyst's Office,, in 2010-11 property taxes raised $55 billion in revenue. Property Tax Revenue Compared With Other Major Revenue Sources 2010-2011 (In Billions) $60 50 40 30 20 10 Corporation Tax State and Local Personal Property Taxes Sales and Use Tax Income Tax and Charges Stable, Predictable, Growing Revenue Source • According to a 2012 _rep rt by the Legislative Analyst's Office, "Property tax revenues increased throughout the recession while other major revenue sources declined significantly." California Apartment • A recent Pepperdine study showed that in 2008-09 when California property values faced the Association dramatic decline in the wake of the sub -prime crisis and the market collapse (industrial and *Partial list Paid for by Californians to Stop Higher Property Taxes 1215 K Street, #22601 Sacramento, CA 95814 1916-498-8322 commercial values fell 6.5%), property taxes collected from these same properties actually rose 5.0%. ® Board of Equalization data shows that revenue from property tax has grown at an average annual rate of 7.5% for non -homeowner property and 7.2% for homeowners since Proposition 13 was put in place. • Local government services and schools can more easily plan out their future budgets because property tax revenues are more predictable and stable than other sources of revenue. Impacts Every Californian — Businesses, Families, Seniors and Public Employee Pension Funds Prop 13 protects homeowners, small businesses and seniors with tax certainty and prevents them from being forced from their properties, while providing the government a stable revenue stream that is consistently growing. All Californians face the impacts of increased property taxes: o Seniors and Families ■ Rents that include property tax charges • Property ownership o Small, Women and Minority Owned Businesses Property ownership ■ Triple net leases that require tenants pay for property tax o Public Employees/Pension Funds ■ Commercial property owned by the funds ■ Real Estate funds held by the funds If a business's revenue or an individual's income doesn't increase, but property taxes do, property taxes take a greater and more burdensome share of their limited finances. Protects Minority From Being Taxed by Majority Proposition 13's two thirds vote majority threshold is a vital protection for all taxpayers in California. It protects a minority of voters from being aggressively taxed by a slim majority vote locally or in the Legislature.