| As the California state population increased, the | | | | part of Article 13A of the California Constitution, all the |
| demand for housing also increased and this resulted in | | | | properties were assessed based on the market value |
| higher property values and higher taxes. | | | | and a locally fixed tax rate was applied to the |
| Local taxes - About 35 percent of the total, county | | | | assessed value to calculate the total tax levied. |
| and city revenue in California is generated from the | | | | Due to the induction of Proposition 13 in Article13A, |
| local taxes and this amounted to about $20 billion in | | | | there are many restrictions on property tax, thus |
| 1997-98. | | | | limiting the local government to raise the revenues |
| . Property Tax-29 percent | | | | obtained from this tax. |
| . Optional sales tax-32 percent | | | | The local tax assessment of real properties is based |
| . Bradley Burns sales tax | | | | on the acquisition value, while other properties still |
| . Vehicle license fee-14 percent | | | | continue to be assessed based on their market value. |
| . Other taxes- 25 percent | | | | . The total assessed value is increased annually, |
| Property Tax- A major source of tax revenue is from | | | | according to the rate of inflation or by 2 percent. |
| local government, cities, school districts, counties and | | | | . On resale of the real property, the reassessment is |
| special districts of California. Since 1849, property | | | | done at market value, based on the purchase price. |
| taxes have been a major part of Californias tax | | | | Property Tax Rate -The countrywide property tax |
| structure and also one of the most stable revenue | | | | rate is restricted to 1 percent of the total assessed |
| resources. In 1999-00, the property tax reached $22.7 | | | | value. Voter approved general obligation debt permits |
| billion. The statewide average current distribution | | | | additional levies. For 1998-99 the average tax rate was |
| procedure is as follows: | | | | 1,069 percent and the highest 1,167 percent was from |
| 1. Schools - 52 percent | | | | the city and county of San Francisco. |
| 2. Counties - 19 percent | | | | Allocation of Property Tax - The share contributed by |
| 3. Cities - 11 percent | | | | the property taxes towards a percent of the total |
| 4. Other local entities - 18 percent | | | | revenue varies widely in different government entities. |
| Property taxes applies to all classes such as | | | | Under Proposition 13 in Article13A, the state gained the |
| residential, industrial, commercial, agricultural, timberland, | | | | responsibility of allocating the property taxes among |
| open space, vacant land and even some personal | | | | the local governments. To reduce state costs, the |
| property. The real property comprises of land, fixtures, | | | | state government shifted its property allocation from |
| buildings, mineral rights and other similar components. | | | | counties, cities and special districts to schools in 1992 |
| Personal property is commonly limited to businesses | | | | and 1993. This shifting was done through a mechanism |
| and also includes equipment, machinery and aircraft. | | | | known as Educational Revenue Augmentation Fund or |
| Properties owned by government or charities, | | | | ERAF. |
| automobiles, securities, household personal property | | | | Issues of Property Tax: |
| and business inventories are exempted from property | | | | . Fairness of Tax- Under recent assessment methods |
| tax. | | | | the property owners could pay vastly different taxes |
| Property taxes are assessed on the value of the real | | | | based on the date of purchase of their property. |
| and personal property in the state. County assessors | | | | . Personal Property Assessment- There are many |
| assess most of the properties locally, while some | | | | issues raised on using appropriate methods to assess |
| properties are assessed by the state, such as the | | | | the value of the personal property, as it largely affects |
| utilities and railroads. Before Proposition 13 became a | | | | businesses. |