Sunday, December 20, 2009

Property values in Solano County have declined significantly during the past few years.

Taxpayer delight is public dismay

…. Property values in Solano County have declined significantly during the past few years. Since January 2007, on a proactive basis, I have temporarily reduced the assessed value of more than 57,000 properties throughout the county. Most of those reductions were made on single-family homes. To a lesser degree, commercial and industrial properties also saw reductions in assessed value. Next year, I anticipate making further reductions on all types of property. Reductions to assessed value are made in accordance with law and based on market activity. In 1978, the California voters passed two constitutional amendments: Proposition 13, which limited the property tax rate to 1 percent of assessed value and limited future property tax increases to no more than 2 percent annually, as shown in the Consumer Price Index (CPI); and, Proposition 8, which allows a temporary reduction in assessed value when real property suffers a decline in value. Proposition 8 is the basis for current and anticipated reductions to assessed values in Solano County. Proposition 8 reductions are a double-edged sword because reductions in assessed value result in reductions in property taxes collected. A reduction in value means lower property taxes, a positive result for the homeowner. However for the counties, cities, schools and special districts that depend on property taxes as a primary source of revenue, a reduction in value has a negative effect, because those agencies must find other ways to provide services with fewer tax dollars…. There are two statewide issues that will impact Solano County. According to a recent press release from the state Board of Equalization, most California homeowners will see a slight decline in their property tax bills based on preliminary estimates of a negative CPI of approximately one quarter of 1 percent. This means owners whose property was not reduced under Proposition 8 may see a reduction under Proposition 13. In another report, the Equalization Board indicated that, on a statewide basis, the total value of state-assessed and county-assessed property declined by 2.4 percent from the previous year. This is the first year-to-year decline in statewide total since the board began keeping records in 1933, according to the report. In that report Solano County's decline was negative 9.7 percent….