Title
Adoption of Resolution Supporting the Schools and Local Communities Funding Act on the November Ballot. (City Manager 2110)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The California Schools and Local Communities Funding Act is Proposition 15 on the November ballot. If approved by a simple majority of voters, the Measure would change the rate of the property tax levied on commercial and industrial properties from one percent of assessed value to one percent of market value, generating $10.9 billion dollars in additional revenues.
The City of Alameda’s (City) annual Legislative Agenda includes support for legislation that promotes social equity and enhances the quality of life and health of Alameda residents and legislation that ensures a positive financial impact on the city.
Staff recommends the City Council adopt a resolution supporting the Schools and Local Communities Funding Act on the November ballot.
BACKGROUND
The State of California’s property tax system has not been substantially changed in 40 years. Commercial and industrial properties include offices, retail, manufacturing facilities, hotels, and vacant commercial and industrial land. Not included are agricultural land uses and residential land uses. Currently, property taxes on commercial and industrial properties are one percent of their assessed value. Properties are generally reassessed only when they are sold, so their assessed value is typically less than market value. If the California Schools and Local Communities Funding Act passes, 78 percent of revenues will be coming from six percent of commercial properties.
DISCUSSION
In California, 40 percent of new property tax revenues go to local schools. If the California Schools and Local Communities Funding Act is approved by voters, it will provide significant revenues to Alameda’s public schools and to the College of Alameda.
The remaining 60 percent of property tax revenues go to cities, counties, and special districts. If voters pass the Measure, Alameda County will receive $429 million in additional revenues in Fiscal Year 2021-22. The City is estimated to receive $7 million in new revenues. Partner agencies would also receive additional funding, including $24 million to AC Transit, $17.6 million to the East Bay Regional Park District, $6.5 million to East Bay Municipal Utilities District, $4 million to BART, and $1.3 million to the Bay Area Air Quality Management District. Without additional revenues, lawmakers will likely be faced with making cuts to critical services.
The City Council has taken many steps in the last six months to provide business relief to Alameda’s small businesses. The California Schools and Local Communities Funding Act protects many small businesses by exempting properties with a market value of $3 million or less from reassessment.
ALTERNATIVES
• Adopt the attached resolution supporting the Schools and Local Communities Funding Act on the November ballot.
• Do not support the Schools and Local Communities Funding Act on the November ballot.
FINANCIAL IMPACT
While there is no financial impact to adopting the attached resolution, there is a projected financial benefit to the City of Alameda if the measure is approved by voters.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This action is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15378 and 15060.
CLIMATE IMPACTS
There are no climate impacts from authorizing the attached resolution.
RECOMMENDATION
Adopt a resolution supporting the Schools and Local Communities Funding Act on the November ballot.
CITY MANAGER RECOMMENDATION
The City Manager is seeking City Council direction on a resolution of support for the Schools and Local Communities Funding Act.
Respectfully submitted,
Sarah Henry, Public Information Officer
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director
cc: Eric Levitt, City Manager