Fresno County and the City of Fresno have finally come to the table on a new tax sharing agreement for newly annexed land, opening the door to fresh, mass housing development in the Valley’s largest city.
The Fresno City Council approved the new agreement in a special session on Friday, bringing near the end of a four-year dispute with the county.
The backstory: The 18-year agreement between the city and county expired in 2020, putting any and all growth for the city in limbo.
- Under the former deal, the city received $0.38 of every property tax dollar on newly annexed property, while the county received the remaining $0.62. But the city wanted a bigger piece of the pie, leading to the 2020 break that has taken four years to heal.
- The two sides have come together on multiple one-off deals over the past four years but could not finalize a permanent agreement until now.
The big picture: The Fresno City Council voted 6-1 to approve the agreement on Friday, with Councilmember Miguel Arias casting the lone vote in opposition in part due to only having 24 hours of notice for the special meeting.
- Instead of a blanket tax sharing system, the new agreement has a major focus on the Southeast Development Area. The city will receive 51% of all property tax dollars for newly annexed land in that area, while the county will take in 49%.
- All other land in the Fresno sphere of influence that gets annexed that is not part of the Southeast Development Area will have a 60-40 split in the county’s favor.
- The city also negotiated a sales tax adjustment from 5.35% to 5%. Fresno expects to retain around $500,000 annually with that adjustment.
What we’re watching: The Fresno County Board of Supervisors is expected to approve the agreement at its meeting on Tuesday.
What they’re saying: The city negotiators, Fresno City Council President Annalisa Perea, Vice President Mike Karbassi, and Councilman Tyler Maxwell , celebrated the 6-1 vote to approve the deal. Perea called the deal a game changer.
- “We are not building housing at the rate in which we need to to properly serve the residents in our city at every income level,” Perea said.
- “This document ensures vital resources to fund services we all rely on, like public safety, clean streets, and beautiful parks. This agreement raises revenues WITHOUT raising taxes on Fresno’s working families,” Karbassi said in a statement.
