Transcript California city finance from the taxpayer's view

You pay fees and taxes to government
but . . . How
much
goes to cities?
How do they
spend it?
A look at California city finance
from the view of the taxpayer
For more information contact:
Michael Coleman
[email protected]
Rev 4/2006
www.CaliforniaCityFinance.com
1
Cities . . .
 are
general purpose local
governments
 provide essential frontline municipal
services tailored to meet the unique
needs of the communities they serve
 are funded mostly by locally
enacted revenues
 provide land use planning and control
2
Counties . . .
 Hybrid
local/state
• state/federal social service & health
programs
– Aid to families (CalWORKS), food stamps,
foster care, In-Home Support Services
• countywide local services
– jails, courts, elections, indigent aid, property
tax collection
• “city” services to unincorporated areas
 More mandates, less discretionary $, more
vulnerable to state budgetary action
3
Special Districts . . .
 some
“dependent”
✔ some “independent”
 some are enterprise (water, irrigation,
sanitation) - some are not (parks & rec,
mosquito abatement, fire)
 where they provide services instead of city
or county, they may get a cut of the
property tax
 redevelopment agencies are dependent
special districts
4
Property Tax:
How much goes to your city?
Typical homeowner in a
full service city and not in
a redevelopment area.
Includes Property
Tax in-lieu of VLF.
5
Source: Coleman Advisory Services computations from Board of Equalization and State Controller data.
Sales Tax:
For each taxable dollar you spend, you pay sales tax to
City 1 ¢
13%
Transit/
Special
(varies)
Prop 172
½¢
Countywide
Transportion
¼¢
County
Health&Welfare
6
½¢
State
General
Fund
5¢
SOURCE: Calif State
Board of Equalization
Vehicle License & Registration Fees
Where do they go?
Total $ 4,815
7
VLF*
3%
1%
31%
14%
20%
17%
14%
Fees
Cities
Orange County
Counties (Health & Welfare)
DeptMotorVeh
Calif Highway Patrol
State Highways
Other State Programs
millions
$ 164
54
$ 1,496
$ 650
$ 970
$ 800
$ 680
Cities
3%
Counties
Cities
Other State
3%
Programs
14%
(Health &
Welfare)
75%
Counties
(Health &
Welfare)
Other State
State
Programs
Highways
14% Calif Highway
17%
State
Highways
*0.65% Vehicle License Fee or "car tax" in lieu of local property tax. 17%
75%
DMV
14%
Patrol
20%
Calif Highway
Source: Coleman Advisory Services calculations from Calif Dept of Finance and DMV data.Patrol
DMV
14%
State General Revenues
including State Income Tax, State Sales&Use Tax:
How much goes to your city?
To Cities
less than
1/5 of 1%
State program
funding includes
schools, colleges,
health & human
services, prisons,
tax relief, courts
and others.
8
FY04-05 Adopted General Fund Budget
excluding bond proceeds. Does not include
voter approved Prop 172 Local Public Safety
Fund = $150m to cities which only partially
offsets ERAF property tax shifts.
$90 Billion State General Fund
Source: Coleman Advisory Services calculations from Calif State Budget.
Federal Income Tax:
How much goes to your city?
other
federal
programs
32%
Cities
< 3%
9
SOURCE: Federal Budget, Center on Policy
Priorities, Coleman Advisory Services
interest
on debt
31%
national
defense
34%
California City Spending
Planning
9%
Public
Utilities
39%
Libraries
2%
Parks&
Rec7%
Other
City Council 1%
& Mgmt 9%
Streets
10%
Fire
7%
Source: State Controller. Excludes San Francisco
10
Police
16%
California City Revenues
UtilityUser
Tax 4%
Service
Charges
Sales
Tax 10%
(water,sewer,
refuse, etc.)
39%
Debt
Service1%
Taxes3%
Property
Tax 11%
Other
Tax 7%
Fees
8%
Lic&Permits2%
11
Not
Restricted
36%
Other 4%
State&
Fed10%
Assessments 1%
Source: Coleman Advisory Services, State Controller.
FY01-02 data adjusted for 2004 VLF – PropTax swap.
Discretionary Revenues and Spending
100%
Typical Full Service City
Fire
90%
Property Tax
80%
70%
60%
Sales & Use
Tax
Police
50%
Franchises
40%
30%
Utility User
Tax
Parks&Rec
Busn Lic Tax
Library
20%
Hotel Tax
Streets
Planning
10%
Other
Other
0%
12
Revenues
1
Source: Coleman Advisory Services Calculations from State Controller reports
Expenditures
2
The Value of City Services

The average city resident pays $59.25/month for city
services (not including fee-funded public utilities such as water,
sewer, flood control and garbage collection provided by many cities)
$59.25
pays for one
of these:
• One month of cable
TV service
• Two or three hardback
books
• One month at the gym
• Three compact disks
• Dinner for two
• Movie and snacks for
a family of four
13
Or…
•
•
•
•
•
•
•
•
•
$59.25 pays for all of these:
24 hour police and fire protection
Well-groomed parks and trees
Safety lighting for streets
Community events
Community economic development
Paved and maintained city streets
Community library system
A well-planned, zoned community
Professional management of a
citizen’s tax investment in the
community