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Orange County Property Tax Reform Summary

Orange County Property Tax Reform Summary. June 26, 2007. Board of County Commissioners. Presentation Outline. Special Session Statutory Changes Proposed Constitutional Amendment Impact to Orange County Summary. Presentation Outline. Special Session Statutory Changes

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Orange County Property Tax Reform Summary

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  1. Orange County Property Tax ReformSummary June 26, 2007 Board of County Commissioners

  2. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  3. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  4. 2007B Special Session Legislature released property tax reform plan on June 11 Special session convened on June 12 Special session adjourned on June 14 Special Session Overview

  5. 2007B Special Session Three bills passed HB 1-B SJR 4-B HB 5-B Statutory changes effective immediately Constitutional amendment to voters on January 29, 2008 Special Session Overview

  6. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  7. House Bill 1-B Establishes “maximum millage” rates for counties, cities and special districts Fiscal Year 2007-08 Roll back taxes to fiscal year 2006-07 level Allows increase for new construction Reduces property taxes by an additional percentage cut (3%, 5%, 7% or 9%) based on prior tax performance Statutory Changes

  8. Fiscal Year 2008-09 Additional tax cut if constitutional amendment passes Fiscal Year 2008-09 and thereafter Maximum millage rate equal to prior year proceeds plus new construction and personal income growth House Bill 1-B Statutory Changes

  9. Bill provides methods for overriding maximum millage rates Fiscal Year 2007-08: Traditional rolled back rate requires 2/3 vote Maintaining current millage rate requires unanimous vote Voter referendum required to exceed the current FY 2006-07 millage rate House Bill 1-B Statutory Changes

  10. Fiscal Year 2008-09 and thereafter: Up to 10% above the maximum millage rate requires 2/3 vote 10% or more above maximum rates requires unanimous vote or referendum Maximum rates based on prior year maximum rate even if board adopts a higher rate with a super majority vote House Bill 1-B Statutory Changes

  11. Governments that don’t comply with statutory requirements lose their ½ cent sales tax revenue sharing from the state House Bill 1-B Statutory Changes

  12. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  13. January 29 special election Increases homestead exemption 75% of first $200,000 of home value exempt 15% from $200,001 – $500,000 of home value is exempt $500,000 upper limit is indexed to personal income growth Minimum exemption = $50,000 Minimum exemption increased to $100,000 for low income seniors Allows the option to keep the “save our homes” exemption instead of the new exemption until the home is sold Proposed Constitutional Amendment

  14. $25,000 tangible personal property exemption for all businesses Affordable housing and working waterfronts assessed on income approach Allows the Legislature to limit local government taxes Proposed Constitutional Amendment

  15. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  16. Fiscal Year 2007-08 Rollback to 2006-07 Allows increase for new construction Either a 3% or a 5% cut for all millage rates except Fire Rescue MSTU Fire Rescue MSTU is treated as independent district and will have a 3% cut Approximately a 15% reduction in the county aggregate millage rate Impact to Orange County

  17. Impact to Orange County FY 07-08 property taxes (no change in millage rate) $843 Million FY 06-07 property taxes FY 07-08 property taxes (rolled back w/ 5% cut) $723 Million $719 Million

  18. Impact to Orange County FY 07-08 property taxes (no change in millage rate) $843 Million FY 06-07 property taxes FY 07-08 property taxes (rolled back w/ 5% cut) $120M or 16.6% Increase $723 Million $719 Million

  19. Impact to Orange County FY 07-08 property taxes (no change in millage rate) $843 Million $124M or 14.7% Decrease FY 06-07 property taxes FY 07-08 property taxes (rolled back w/ 5% cut) $120M or 16.6% Increase $723 Million $719 Million

  20. Fiscal Year 2008-09: Additional $60 – $70 million additional tax cut if constitutional amendment passes Fiscal Years 2008-09 and thereafter: Taxes capped at prior year’s property tax level plus new construction and personal income growth Impact to Orange County

  21. Presentation Outline • Special Session • Statutory Changes • Proposed Constitutional Amendment • Impact to Orange County • Summary

  22. Property tax reform passed during special session Statutory requirements go into effect immediately Constitutional amendment subject to voter approval on January 29, 2008 and would be effective beginning in Fiscal Year 2008-09 Budget process is underway and adjustments are being made Full budget discussion In July Summary

  23. Orange County Property Tax ReformSummary June 26, 2007 Board of County Commissioners

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