Orange County Orange County Property Tax ReformProperty Tax Reform
SummarySummary
June 26, 2007June 26, 2007
Board of County CommissionersBoard 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
Presentation OutlinePresentation Outline
Special Session Special Session Statutory ChangesStatutory Changes
Proposed Constitutional Proposed Constitutional AmendmentAmendment
Impact to Orange Impact to Orange CountyCounty
SummarySummary
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
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
Presentation OutlinePresentation Outline
Special Session Special Session Statutory ChangesStatutory Changes
Proposed Constitutional Proposed Constitutional AmendmentAmendment
Impact to Orange Impact to Orange CountyCounty
SummarySummary
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
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
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
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
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
Presentation OutlinePresentation Outline
Special Session Special Session Statutory ChangesStatutory Changes
Proposed Constitutional Proposed Constitutional AmendmentAmendment
Impact to Orange Impact to Orange CountyCounty
SummarySummary
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
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
Presentation OutlinePresentation Outline
Special Session Special Session Statutory ChangesStatutory Changes
Proposed Constitutional Proposed Constitutional AmendmentAmendment
Impact to Orange Impact to Orange CountyCounty
SummarySummary
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
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)
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)
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)
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
Presentation OutlinePresentation Outline
Special Session Special Session Statutory ChangesStatutory Changes
Proposed Constitutional Proposed Constitutional AmendmentAmendment
Impact to Orange Impact to Orange CountyCounty
SummarySummary
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
Orange County Orange County Property Tax ReformProperty Tax Reform
SummarySummary
June 26, 2007June 26, 2007
Board of County CommissionersBoard of County Commissioners