orange county property tax reform summary june 26, 2007 board of county commissioners

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Orange County Orange County Property Tax Reform Property Tax Reform Summary Summary June 26, 2007 June 26, 2007 Board of County Commissioners Board of County Commissioners

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Page 1: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Orange County Orange County Property Tax ReformProperty Tax Reform

SummarySummary

June 26, 2007June 26, 2007

Board of County CommissionersBoard of County Commissioners

Page 2: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 3: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 4: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Special Session OverviewSpecial Session Overview

2007B Special Session2007B Special Session

Legislature released Legislature released property tax reform property tax reform plan on June 11plan on June 11

Special session Special session convened on June 12convened on June 12

Special session Special session adjourned on June 14adjourned on June 14

Page 5: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Special Session OverviewSpecial Session Overview

2007B Special Session2007B Special Session

• Three bills passedThree bills passed

•HB 1-BHB 1-B

•SJR 4-BSJR 4-B

•HB 5-BHB 5-B

• Statutory changes Statutory changes effective immediatelyeffective immediately

• Constitutional amendment Constitutional amendment to voters on January 29, to voters on January 29, 20082008

Page 6: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 7: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Statutory ChangesStatutory Changes

House Bill 1-BHouse Bill 1-B Establishes “maximum millage” Establishes “maximum millage”

rates for counties, cities and rates for counties, cities and special districtsspecial districts

Fiscal Year 2007-08Fiscal Year 2007-08 Roll back taxes to fiscal year Roll back taxes to fiscal year

2006-07 level2006-07 level Allows increase for new Allows increase for new

constructionconstruction Reduces property taxes by an Reduces property taxes by an

additional percentage cut (3%, additional percentage cut (3%, 5%, 7% or 9%) based on prior tax 5%, 7% or 9%) based on prior tax performanceperformance

Page 8: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Statutory ChangesStatutory Changes

Fiscal Year 2008-09Fiscal Year 2008-09 Additional tax cut if Additional tax cut if

constitutional amendment constitutional amendment passes passes

Fiscal Year 2008-09 and Fiscal Year 2008-09 and thereafterthereafter Maximum millage rate equal Maximum millage rate equal

to prior year proceeds plus to prior year proceeds plus new construction and new construction and personal income growth personal income growth

House Bill 1-BHouse Bill 1-B

Page 9: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Statutory ChangesStatutory Changes

Bill provides methods for overriding Bill provides methods for overriding maximum millage ratesmaximum millage rates

Fiscal Year 2007-08:Fiscal Year 2007-08: Traditional rolled back rate requires Traditional rolled back rate requires

2/3 vote2/3 vote Maintaining current millage rate Maintaining current millage rate

requires unanimous voterequires unanimous vote Voter referendum required to exceed Voter referendum required to exceed

the current FY 2006-07 millage ratethe current FY 2006-07 millage rate

House Bill 1-BHouse Bill 1-B

Page 10: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Statutory ChangesStatutory Changes

Fiscal Year 2008-09 and thereafter:Fiscal Year 2008-09 and thereafter: Up to 10% above the maximum millage Up to 10% above the maximum millage

rate requires 2/3 voterate requires 2/3 vote 10% or more above maximum rates 10% or more above maximum rates

requires unanimous vote or referendum requires unanimous vote or referendum Maximum rates based on prior year Maximum rates based on prior year

maximum rate even if board adopts a maximum rate even if board adopts a higher rate with a super majority votehigher rate with a super majority vote

House Bill 1-BHouse Bill 1-B

Page 11: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Statutory ChangesStatutory Changes

Governments that don’t comply Governments that don’t comply with statutory requirements lose with statutory requirements lose their ½ cent sales tax revenue their ½ cent sales tax revenue sharing from the statesharing from the state

House Bill 1-BHouse Bill 1-B

Page 12: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 13: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Proposed Constitutional Proposed Constitutional AmendmentAmendment

January 29 special election January 29 special election Increases homestead exemptionIncreases homestead exemption

75% of first $200,000 of home value exempt75% of first $200,000 of home value exempt

15% from $200,001 – $500,000 of home value is exempt15% from $200,001 – $500,000 of home value is exempt

$500,000 upper limit is indexed to personal income $500,000 upper limit is indexed to personal income growth growth

Minimum exemption = $50,000 Minimum exemption = $50,000

Minimum exemption increased to $100,000 for low income Minimum exemption increased to $100,000 for low income seniorsseniors

Allows the option to keep the “save our homes” exemption Allows the option to keep the “save our homes” exemption instead of the new exemption until the home is soldinstead of the new exemption until the home is sold

Page 14: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Proposed Constitutional Proposed Constitutional AmendmentAmendment

• $25,000 tangible personal $25,000 tangible personal property exemption for all property exemption for all businessesbusinesses

• Affordable housing and Affordable housing and working waterfronts assessed working waterfronts assessed on income approachon income approach

• Allows the Legislature to limit Allows the Legislature to limit local government taxeslocal government taxes

Page 15: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 16: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Impact to Orange CountyImpact to Orange County

Fiscal Year 2007-08Fiscal Year 2007-08

Rollback to 2006-07Rollback to 2006-07 Allows increase for new Allows increase for new

constructionconstruction

Either a 3% or a 5% cut for all Either a 3% or a 5% cut for all millage rates except Fire Rescue millage rates except Fire Rescue MSTUMSTU

Fire Rescue MSTU is treated as Fire Rescue MSTU is treated as independent district and will independent district and will have a 3% cuthave a 3% cut

Approximately a 15% reduction Approximately a 15% reduction in the county aggregate millage in the county aggregate millage raterate

Page 17: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Impact to Orange CountyImpact to Orange County

FY 06-07 property FY 06-07 property taxes taxes

$723$723

MillionMillion

$843$843

MillionMillion

$719$719

MillionMillion

FY 07-08 property taxesFY 07-08 property taxes(no change in millage rate) (no change in millage rate)

FY 07-08 property taxes FY 07-08 property taxes

(rolled back w/ 5% cut)(rolled back w/ 5% cut)

Page 18: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Impact to Orange CountyImpact to Orange County

$723$723

MillionMillion

$843$843

MillionMillion

$719$719

MillionMillion

$120M or 16.6% $120M or 16.6% IncreaseIncrease

FY 06-07 property FY 06-07 property taxes taxes

FY 07-08 property taxesFY 07-08 property taxes(no change in millage rate) (no change in millage rate)

FY 07-08 property taxes FY 07-08 property taxes

(rolled back w/ 5% cut)(rolled back w/ 5% cut)

Page 19: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Impact to Orange CountyImpact to Orange County

$723$723

MillionMillion

$843$843

MillionMillion

$719$719

MillionMillion

$120M or 16.6% $120M or 16.6% IncreaseIncrease

$124M or 14.7% $124M or 14.7% DecreaseDecrease

FY 06-07 property FY 06-07 property taxes taxes

FY 07-08 property taxesFY 07-08 property taxes(no change in millage rate) (no change in millage rate)

FY 07-08 property taxes FY 07-08 property taxes

(rolled back w/ 5% cut)(rolled back w/ 5% cut)

Page 20: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Impact to Orange CountyImpact to Orange County

Fiscal Year 2008-09:Fiscal Year 2008-09: Additional Additional $60 – $70 million additional $60 – $70 million additional tax cut if constitutional tax cut if constitutional amendment passesamendment passes

Fiscal Years 2008-09 and Fiscal Years 2008-09 and thereafter:thereafter: Taxes capped at Taxes capped at prior year’s property tax level prior year’s property tax level plus new construction and plus new construction and personal income growthpersonal income growth

Page 21: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Presentation OutlinePresentation Outline

Special Session Special Session Statutory ChangesStatutory Changes

Proposed Constitutional Proposed Constitutional AmendmentAmendment

Impact to Orange Impact to Orange CountyCounty

SummarySummary

Page 22: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

SummarySummary

Property tax reform passed during Property tax reform passed during special sessionspecial session

Statutory requirements go into effect Statutory requirements go into effect immediatelyimmediately

Constitutional amendment subject to Constitutional amendment subject to voter approval on January 29, 2008 voter approval on January 29, 2008 and would be effective beginning in and would be effective beginning in Fiscal Year 2008-09Fiscal Year 2008-09

Budget process is underway and Budget process is underway and adjustments are being madeadjustments are being made

Full budget discussion In JulyFull budget discussion In July

Page 23: Orange County Property Tax Reform Summary June 26, 2007 Board of County Commissioners

Orange County Orange County Property Tax ReformProperty Tax Reform

SummarySummary

June 26, 2007June 26, 2007

Board of County CommissionersBoard of County Commissioners