RES 87418 - Laserfiche WebLink

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS Article XIIIA of the California Constitution limits the taxing powers of California public agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed one percent of the "full cash value" of the property, and effectively prohibits the levying of any other ad valorem property tax except for taxes above that level required to pay debt service on voter-approved general obligation bonds. "Full cash value" is defined as the County Assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value" or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. The full cash value is subject to annual adjustment to reflect inflation at a rate not to exceed two percent or a reduction in the consumer price index or comparable local data, or declining property value caused by damage, destruction or other factors. The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interes~ and redemption charges on any indebtedness approved by the voters before July 1, 1978 or any bonded indebtedness for the acquisition or improvement of real property approved by two-thirds of the votes cast by the voters voting on the proposition. Article XIIIB of the California Constitution limits the amount of appropriations of the state and of local governments for "proceeds of taxes" to the amount of appropriations of the entity for the prior year, adjusted for changes in the cost of living, population and services provided. The City's appropriation limit for the 1986-87 fiscal year was $11,906,833. The 1987-88 budget appropriations for proceeds of taxes is $12,575,501, which is below the available adopted limit of $21 million which was approved by a ballot measure on April 8, 1986. The ballot measure was approved by a vote of 4500 voters in favor of the increased limit and 637 voters opposed to such increase. The California Constitution requires successive approval of an appropriations level above the appropriations limit by the voters of the City at least every four years. Recent Initiative Statute Affectinq Local Taxes On November 4, 1986, California voters approved an initiative statute known as Proposition 62. This statute (i) requires ~haz any tax for general governmental purposes imposed by local governments be approved by resolution or ordinance adopted by a two-thirds vote of the governmental 33