HomeMy WebLinkAboutSS3 - Revenue Status & Projections�S5 3 -a // 2 /,go
2007 -08 Revenue Status & Projections for 2008 -09
General Considerations:
• Housing Market turmoil
• Tightening of Credit Policies
• Deterioration of the "Wealth Effect' and consumer confidence
• Threat of economic recession
• State budget crisis
Threats:
• Property Tax Delinquencies
• Foreclosures
• Reassessments
• Slower Consumer Spending
• Lower Hotel Occupancy
• Legislative Actions
US Real GDP Growth
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
2004 2005 2006 2007 Estimted 2008 Projected
[GDP Growth 3.6% 3.1% 2.9% 2.1% I.W.
1
General Fund Major Revenue Sources
Actual Growth
30.00%
- - - -1
t Secured Property Tax
25.00%
Sales Tax
20.00%
O
UTOT - Commercial
15.00%
a
10.00%
5.00
� O
0.00%
°p N
-5.00%
-5.00 %
-
--
- -- o - -"
� o
� N
°
-10,00%
N �
- 15.00%
- 20.00%
-
General Fund Major Revenue Sources
3 Yr Avg Growth (Smoothing)
20.00%
Secured Property Tax
--N— Sas Tax
UTOle T - Commemial
1500%
500%
0.00%
ape
O
N m
� O
°p N
-5.00%
-
--
- -- o - -"
2
Secured Property Taxes
• Assessed Value growth trend declining off record highs
• 20 Yr. average Assessed Valuation growth approximately 8%
• Gap between market and assessed valuation is still significant
2007 -08 collection trend slightly higher than revised estimates
• No data on delinquencies, foreclosures or reassessments
• 2008 -09 budgeted growth increase conservative at 4%
30M%
Plcx�I�Y.7�
20.00%
15.00% 1-4 / x
Assessed Value Growth
Assessed Value Growth
— Typical Budgeted Growth
— Regression Trendline
I
10.00% -- -- -
500%
0.00%
-
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4
- WEBSTER J. GUILLORY
OFFICE OF THE ASSESSOR COUNTY ASSESSOR
Telephone: (714) 834 -2727
www Ocaov.corn /assessor
Property Value Decline - Will It Lower My Property Taxes?
Orange County's real estate markets have slowed, and some property values are down in some areas.
Does a decline in a property's market value require a reduction in property taxes? The answer is that it
depends on the Market Value and the Taxable Value.
Market Value - Is how much the property would sell for (the unconditional sales price)
Taxable Value - Is established by the Assessor, (the Prop. 13 value), and this value may be
increased by a CPI factor of up to 2% per year as specified by California laws
A temporary reduction in property taxes can only be granted if the Market Value falls below the Prop.
13 value (Taxable Value). Some property purchased in 2005, 2006 and 2007 would be the most likely
to qualify. Property is valued for property tax purposes each year as of January 1.
The Assessor reviews property each year looking for areas and individual property subject to economic
adjustment (Prop. 8) considerations. Taxpayers send market information also, to assist the Assessor in
this review. Each property is unique, and the Assessor is required to consider all aspects of the
property and market conditions when making a value determination.
The chart below compares the Prop. 13 Taxable Value of a home purchased in January 2000 to the
Orange County's Median Home Price (Market Value) from January 2000 to January 2007. As you can
see, the Taxable Value is normally below the Market Value.
Taxable Value is printed on the value notices sent by the Assessor in July, and on property tax bills
sent by the Tax Collector in September. You can search for Taxable Value by parcel number or
property address on the Tax Collector's website, at http / /tax ocaov com /tcweb /search pane asp.
Remember, property taxes may be temporarily reduced if the Market Value drops below the
Taxable Value. For more information, you can call the Assessor Department at (714) 834 -2727.
Release: December 2007
O. C. Median Home Price vs.
Prop. 13 Taxable Value
� —O. C.
Median Horne Price $600.000
SEOU.000
— + — Prop.
13 Taxable Value
$582,750
$550,000
5534,000
Market Value
$450,000
$450,000
$369,000
i
$350,060
Taxable Value
$3oe,000
$287.945
$276.000
a
251,000
$250,000
- -
- - -- —
— -
Jan. Jan.
Jan. Jan. Jan. Jan. Jan.
Jan. Nov.
2000 2001
2002 2003 2004 2005 2006
2007 2007
SOURCE. OC
Median Home Price- DONewscom
Taxable Value is printed on the value notices sent by the Assessor in July, and on property tax bills
sent by the Tax Collector in September. You can search for Taxable Value by parcel number or
property address on the Tax Collector's website, at http / /tax ocaov com /tcweb /search pane asp.
Remember, property taxes may be temporarily reduced if the Market Value drops below the
Taxable Value. For more information, you can call the Assessor Department at (714) 834 -2727.
Release: December 2007
Assessed Value
by Land Base Decade and Significant Periods
2005-07
$11,817,658,2'
34%
2000 -04
$10,063,612,197
29%
1970's
$2,121,883,059
6%
1980's
$4,004,583,104
11%
1990'$
$7,170,185,363
20%
Assessed Property Parcels
by Land Base Decade and Significant Periods
2005 -07
19,310
32%
1970's
6,969
12%
1980's
5,522
9%
2000 -04
19,029
32%
6
1990's
9,017
15%
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
December
January
February
March
April
May
June
Final June
December
January
February
March
April
May
June
Final June
Secured Property Tax Collection Trend
December January February March
9nns AM,mI 9nnA A�„ >i 9nn7
-+ -2005 Actual
2006 Actual
2007Actual
-x -2008 Actual
2008 Collection Trend
12008 As Budgeted
-2009 As Budaeted
April May June Final June
9nnA Trand 9nnR Ac Rurlaeted 2009 As Budgeted
19,668,047
19,437,816
20,899,553
28,036,536
23,308,762
-1.98%
24,241,113
22,507,701
25,822,417
27,638,819
29,669,307
29,360,138
30.534,543
22,735,530
25,822,417
27,638,819
29,768,520
29,458,317
30,636,649
25,117,434
28,249,097
30,636,477
32,816,228
32,474,266
33,773,237
35,441,868
39,741,373
47,943,899
47,947,610
47,447,972
49,345,890
39,715,034
44,918,035
48,408,589
51,973,358
51,431,769
53,489,040
39,715,024
45,153,176
48,408,589
52,064,131
51,521,596
53,582,460
40,222,852
45,371,305
48,905,823
52,547,572
52,000,000
54,080,000
Collection Trend
9nnR 9nnA 9nn7 Wr Trend Median Soread
48.90%
42.84%
42.73%
44.82%
42.8%
-1.98%
55.96%
56.91%
56.51%
56.46%
56.5%
0.05%
56.52%
56.91%
56.51%
56.65%
56.5%
-0.13%
62.45%
62.26%
62.64%
62.45%
62.4%
0.00%
88.11%
87.59%
98.03%
91.25%
88.1%
-3.13%
98.74%
99.00%
98.98%
98.91%
99.0%
0.08%
98.74%
99.52%
98.98%
99.08%
99.0%
-0.10%
100.00%
100.00%
100.00%
100.00%
100.0%
0.00'/0
7
Sales Taxes
Top Segment Producers:
Luxury Auto Sales - Continued Record Sales
- Lexus Dealership Relatively New
( Leasing Stream not fully realized)
Restaurants - New High End Restaurants Boosting Sales
Department Stores - Fashion Island Nordstrom on the horizon
Sales Taxes by Business Segment
13% 21%
3%
3% 44%
4 °,0
4% 18%
a
7% 7% 9%
■ Auto Sales - New -10
■ Restaurants - 295
❑ Department Stores - 25
❑ Miscellaneous Retail - 632
■ Leasing - 44
B Apparel Stores -152
■ Service Stations -17
❑ Misc. Vehicle Sales - 37
■ Furniture / Appliance - 232
■ Food Markets - 34
O Light Industry -168
O Other - 655
No 4th Qtr Results (Due End of March early April)
Collection Trend ahead of 2007 -08 original estimates however, the
2007 -08 estimates have not been revised yet because there is not
sufficient data available to support the revenue revision
2008 -09 includes a conservative growth estimate of 2% over the
original 2007 -08 budget estimates
8
25,000.000
20,000.000
15,000,000
10,000,000
5,000,000
December
January
February
March
April
May
June
Final June
December
January
February
March
April
May
June
Final June
Sales Tax Collection Trend
December January February March
9nns AH.,M 7nnA A'fual 9nn7A,e „a1
April May June Final June
7n06 Trwnd 7006 As Budgeted 2009 As Budceted
6,884,912
7,793,151
7,376.293
5,966.892
8,131,687
8,294,321
8,167,088
9,164,572
b y c 1 � rYi IN
Mz
i',.
9,873,939
9,877,788
-� 2005 Actual
10,973,553
- 2006 Actual
!
2007A=al
t
- 2008 Actual
f'
2008 Trend Forecast -
- 2O08 As Budgeted
14,164,454
--2009 As Budgeted
14,255,572
December January February March
9nns AH.,M 7nnA A'fual 9nn7A,e „a1
April May June Final June
7n06 Trwnd 7006 As Budgeted 2009 As Budceted
6,884,912
7,793,151
7,376.293
5,966.892
8,131,687
8,294,321
8,167,088
9,164,572
8,927,993
9,984,808
9,680,332
9,873,939
9,877,788
11,011,472
10,973,553
12,113,316
11,743,933
11,978,812
11,685,402
13,030,715
12,959,506
14,323.499
13,886,719
14,164,454
12,802,954
14,255,572
14, 225,523
15,695,188
15,216, 580
15,520,911
14,275,036
15,907,572
15,947,923
17,536,043
17,001,300
17.341,326
16,115,055
18,003,156
18,302,247
19.921.384
19,313, 903
19,700,181
18,977,829
21,465,557
21,662,440
23,596,683
22,877,127
23,334,670
Collection Trend
9nnA 9nnA 7nn7 Wr Trwnt Median Spread
36.3%
36.3%
29.2%
33.9%
36.3%
2.37%
43.0%
42.7%
36.9%
40.9%
42.7%
1.83%
52.0%
51.3%
47.0%
50.1%
51.3%
1.18%
61.6%
60.7%
56.8%
59.7%
60.7%
1.00%
67.5%
66.4%
63.1%
65.7%
66.4%
0.75%
89.3%
89.6%
71.7%
83.5%
89.3%
5.77%
113.1%
83.9%
83.3%
93.4%
83.9%
-9.55%
100.0%
100.0%
100.0%
100.0%
100.0%
0.00%
9
Transient Occupancy Taxes
• Feedback From Hoteliers is Positive
• Fairmont & Marriot Expansion are complete — More rooms available
• Pelican Hills Resort - 220 Rooms (Expected to Open Nov 2008
and become fully operation by Feb 2009)
0 100 Villas will be available @ $2,000 /Night
0 120 Rooms will be available $3501 Night
Potential Settlement of Online TOT collections (Lead by County of
LA).
• 2007 -08 collection trend Suggests 17% increase over current
budget estimate.
• 2008 -09 revenue estimate held relatively flat compared to current
collection trend.
10
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
t 2005 Actual
2006 Actual
2007Actual
-N- -2008 Actual
2008 Collection Trend
+2008 As Budgeted
--2009 As Budoeted
UTOT Collection Trend
December January
February
March
April
May
June
Final June
2005 Actual 2006 Actual
2007Actual
2008
Trend
2008 As
Budgeted 2009
As Budgeted
December
January
February
March
April
May
June
Final June
December
January
February
March
April
May
June
Final June
3,188,985
3,857,308
4,957,569
4,647,740
4,309,436
5,013,818
3,700,710
4,277,447
5,740,929
5,786,471
4,920,678
5,724,968
4,214,645
4,949,440
6,476,828
6,576,811
5,615,238
6,533,055
4,739,558
5,754,202
7,329,552
7,497,386
6,401,219
7,447,505
5,342,622
6,472,111
8,065,047
8,374,150
7,149,795
8,318,436
5,948,364
7,253,752
9,172,516
9,414,495
8,038,035
9,351,860
6,535,288
7,999,107
9,945,578
10,309,391
8,802,091
10,240,802
8,162,909
8,694,941
10,919,757
1 11,762,396
10,042,657
11,684,140
Collection Trend
onna inns onrn W, Trcnrl Madian Snread
39.0%
44.4%
45.4%
42.9%
44.4%
1.45%
45.2%
49.2%
52.6%
49.0%
49.2%
0.20%
51.5%
56.9%
59.3%
55.9%
56.9%
1.01%
57.9%
66.2%
67.1%
63.7%
66.2%
2.44%
65.3%
74.4%
73.9%
71.2%
73.9%
2.66%
72.7%
83.4%
84.0%
80.0%
83.4%
3.39%
79.9%
92.0%
91.1%
87.6%
91.1%
3.43%
100.0%1
100.0%1
100.0%1
100.0%
100.0%1
0.00%
11
Legislative Actions
Prop 1A
Protects Local Government revenue streams against permanent shifts in
local funding but does allow the State to borrow about $2 million from the
City of Newport Beach but this amount would need to be repaid within 3
fiscal years.
Highway Users Tax Delay
State to Borrow $666,034 from City Gas Tax apportionments between
April 08 — August 08 but to be repaid Sept 08
Son of ERAF, New Triple Flip Plan or Other State Initiative? No positive
indication that any of this will happen at this point.
Legislative Analysis:
Good Source as it relates to local government finances:
www.californiacitvfinance.com
Reserve Levels
Operating Reserve Funded at $7.9 million
PIERS Reserve $5.0 million
Contingency Reserve Fully Funded at $18.9 million
Facilities Replacement Reserve Funded at $20.2 million
80,000.000
70,000,000
60.000.000
50.000.000
40.000.000
30.000,000
20.000.000
10.000.000
General Fund
Total Fund Balance
2000 2001 2002 2003 2004 2005 2006 2007 2008 BW 2009 Bud
12
General Fund Revenues
Top Revenue Sources
180,000,000 - --
160,000,000
—4—Secured Property Tax
140,000,000 Sales Tax wt Prop Tax In Lieu
UTOT - Commercial
120,000,000 Total General Fund
100,D00,000
80,000,000
60,000,000
40,000,000
20,000,000
i
Secured Property Tax
Sales Tax &Property Tax In Lieu
UTOT - Commercial
TOTAL GENERAL FUND
Annual Growth
Top 3 Sources as % of Total
eons 2nne 2007 2008 Oriainal 2008 Revised 2009 Bud
45,371,305
48,905,823
51,480,000
52,000,000
54,080,000
24,317,656
27,185.585
S m
N N
N
31,592,735
140,222,852
8,182,909
8,694,941
pW
� S
10,042.657
10,042,657
N
123,295,015
135, 546,799
0
O
1 146,964,943
1 148,408,349
O
N
eons 2nne 2007 2008 Oriainal 2008 Revised 2009 Bud
9.9%1
45,371,305
48,905,823
51,480,000
52,000,000
54,080,000
24,317,656
27,185.585
29,010,693
30,445,828
30,894,666
31,592,735
140,222,852
8,182,909
8,694,941
10,919,757
10,042.657
10,042,657
11,684,140
123,295,015
135, 546,799
146,921,651
1 146,964,943
1 148,408,349
152,773,324
9.9%1
8.4%1
0.0%1
1.0%
59% 60%
60%
63%
63-/% ,64%
13