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November 02, 2008
Numbers Nerd
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| Image: Percentage increases in property tax, sales
tax, and property tax in lieu of vehicle fee, built into 10 year budget
forecasts. Property tax accounts for 11%
of General Fund revenue, sales tax accounts for 43% of General
Fund revenue, and VLF funds 13% (based on 2007 data). We were discussing budgeted increases in tax income over the last couple of posts. And since it's rainy and I have a little time this morning, I figured I would calculate the budgeted increases. So there they are above. The data points above are from the 2008-2009 adopted budget (here it is). I was a little confused over the Finance Department's statement that the budgeted increase in property tax for 2008 was 2.5%. I covered that statement two posts back under Full Court Press Conference. If you calculate the budgeted increase in property tax income the number is 4%. Looking at the property tax in lieu of vehicle license fee (VLF) income, you can see where the 2.5% figure comes from. I'll be curious to see if the 8.7% increase in income comes from property tax income or the rebate from the state vehicle license fee, or if it is a composite of both figures. Beyond a few years the estimates are pure guesswork. But it is interesting that the VLF funds track the sales tax funds exactly with a simple reduction of 1%. Here are two points that interest me. 1: If the 8.7% increase in property tax income is associated with the VLF funds then it has diverged significantly from sales tax income which has been flat or down over the last three quarters. Since the 10 year budget forecast clearly ties these two tax incomes together, the fact that they so significantly diverge should indicate the forecasts are based on a faulty premise. 2.If the 8.7% increase in property tax income comes from regular property tax (versus VLF funds) then the anticipated growth was 4% not the 2.5% stated by the Finance Department. This would reduce the net income from the $600,000 mentioned. As I mentioned in a previous comment, it is not possible to know exactly how the Finance Department comes up with their numbers without asking them. I like to avoid wasting the time of city staff unless I'm really really curious. But this little mystery will likely be solved with the budget report presented at the 11/4/2008 City Council meeting. |
Posted by Lon at November 2, 2008 07:24 AM
Comments
I would not count on the State meeting their obligation to back-fill the VLF. If the legislature doesn't have the votes to restore the full VLF charged to the vehicle owners, don't count on them to back-fill it.
Posted by: Bob at November 2, 2008 08:54 AM
Bob,
I think you're right. If the state government is going to start taking from the city governments the VLF back fill would be an area to target.
I also think we'll start to see discussions of tax increases, either targeted or general, coming from a state level (and maybe closer to home).
Lon
Posted by: Lon at November 2, 2008 09:33 AM