A long-awaited update to the formula for divvying up Stanislaus County’s property tax revenues has finally come to fruition.
A long-awaited update to Stanislaus County’s mater property tax revenue agreement with the cities to even out revenue sharing has finally come to fruition.
The Stanislaus County Board of Supervisors unanimously approved a new master property tax agreement on Tuesday.
Now, the county’s nine cities will have the opportunity to individually approve the deal they negotiated with the county by July 20.
The existing arrangement, which governs how taxes are split for homes and properties annexed from the county into cities, has been in place since 1996.
That tax arrangement sprung from Proposition 13 in 1978 and Assembly Bill 8 in 1979, which required the rebalance of revenue streams between state and local governments.
Currently, Stanislaus County receives 12 percent of total property tax allocations, ranking 45th out of the state’s 58 counties. The nine cities within the county receive 5.7 percent of total property tax allocations, ranking 26th out of 58.
The 1996 deal was structured so the county retained all base funding, and tax increment was split at a 70-30 rate to the county and cities, respectively.
With both entities required to deposit a certain amount of their property tax revenue into the Educational Revenue Augmentation Fund (ERAF) – 55 percent for the county and an average of 26 percent for the cities – the cities net an average of $946 in revenue for every $1 million assessed compared to $891 for the county.
There has been immense growth since 1996, however, as around 100 individual tax rate areas have been formed in the county through annexations by the cities.
The combined value of those properties has grown $6.2 billion as of the current fiscal year.
Under the new agreement, the county will continue to retain all base property tax revenue, but now the revenue growth for the new tax rate areas since the last deal will be split 50-50.
All properties annexed in the future will be also be shared 50-50, unless otherwise negotiated.
The net revenue sharing once accounting for ERAF is expected to be 68 percent for the city and 32 percent for the county on average.
For every $1 million in assessed value growth, the new agreement projects cities to net an average of $1,365 in revenue while the county will net $637.
“This is a long time coming. It’s exciting,” Supervisor Mani Grewal said. “Obviously it required a lot of communication, understanding, compromise, but as a former Modesto City Councilmember, I understand some of the challenges that our cities face. And hopefully this agreement leads to better economic vitality for the shared constituency that we all share, which is the residents of Stanislaus County. So it’s exciting that this has gotten done – long time coming.”
