5/30/2024
Issue 450
You may have heard City Staff and City Council often refer to the City of Cathedral City being a post-proposition 13 City. What exactly is Proposition 13 and how does it affect local government finance?

In 1978, a simple majority of California voters approved Proposition 13, seeking property-taxpayer relief and uniformity, with far-reaching consequences, some unintended. Proposition 13 reduced property revenues by more than half and effectively abolished any local control regarding property tax. Local governments still have wide latitude on the spending of the remaining revenues they receive; however, the allocation of the tax is controlled by the State Legislature.

Six Provisions of Proposition 13 Affecting Local Finance
  1. One percent rate cap. With limited exceptions, Proposition 13 capped property tax rates at one (1) percent of full cash value at the time of acquisition. Prior to Proposition 13, local jurisdictions independently established their tax rates.
  2. Assessment Rollback. Proposition 13 rolled back property values as determined for tax purposes to their Fiscal Year 1975-1976 level.
  3. Reassessment upon change of ownership. Proposition 13 replaced the practice of annually reassessing property at full cash value with a system based on cost at acquisition. Under Proposition 13, property is assessed at market value for tax purposes only when it changes ownership. Subsequent annual values are limited to this “base year” amount plus an annual growth factor of 2 percent or CPI, whichever is less.
  4. Responsibility for allocating property tax transferred to the state. Proposition 13 gave state lawmakers responsibility for allocating property tax revenues among local jurisdictions. Prior to Proposition 13, jurisdictions established their tax rates independently and their property tax revenues depended on the rate levied and the value of the property located within the boundaries of their jurisdiction.
  5. Voter approval for special taxes. Proposition 13 requires two-thirds voter approval for property taxes raised by local governments for a designated “special” purpose.
  6. Taxes imposed by the State Legislature require a two-thirds vote of the Legislature. In order the change any provision of Proposition 13, it would require a new state-wide vote.
Finally, the amount of property taxes allocated to local governments depends on state property tax allocation laws, principally Assembly Bill 8 (“AB 8”). The AB 8 system was designed, in part, to allocate property tax revenue in proportion to the share of property taxes received by a local government in the mid-1970s (those cities incorporated prior to the implementation of Proposition 13 in 1978). Under this system, local governments that received a large share of property taxes in the 1970s typically continue to receive a relatively large share of property taxes today. Although there have been changes to the original property tax allocation system contained in AB 8, the allocation system continues to be substantially based on the variation in property tax receipts in effect in the 1970s.

This variation largely reflects service levels provided by local governments in the 1970s. Those local governments providing many services generally collected more property taxes in the 1970s to pay for those services. As a result, those local governments received a larger share of property taxes under AB 8. For example, cities and counties providing many government services, including police and fire protection, park and recreation programs, and water services, typically receive more property tax revenue than governments that rely on special districts to provide some or all these services. Local governments not yet incorporated by 1978, which Cathedral City did not incorporate until 1981, essentially fell victim to Proposition 13 and AB 8 and thus receive on average 60% less in property tax revenue than those cities incorporated prior to 1978.
Kevin Biersack
Financial Services Director
(760) 770-0378
KBiersack@cathedralcity.gov
City Council of Cathedral City Renames Two Streets in Honor of Local High School Students

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The Student Street Naming Ceremonies recognized Lota Uyanwune of CCHS and Michael Bray of MSJ…Read more

Journey With CCTV Host Conrad Angel Corral to Bear Wear in Cathedral City

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Don’t forget to support your local Cathedral City restaurants participating in Visit Greater Palm Springs Restaurant Week, May 31 – June 9, 2024!…Read more

Join Mayor Pro Tem Nancy Ross, Councilmember Rita Lamb & CCFD for June 1, 2024, Emergency Preparedness Event

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Join Mayor Pro Tem Nancy Ross, Councilmember Rita Lamb & CCFD for June 1, 2024, Emergency Preparedness Event
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The following is a list of upcoming and current vacancies on Commissions, Committees...Read more

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Cathedral City Library Is the “Coolest” Place to Be in Summer 2024

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Coachella Valley Repertory Announces 2024 Summer Cabaret Series in Downtown Cathedral City

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Emergency Preparedness Event

June 1, 2024

Join Mayor Pro Tem Nancy Ross, Councilmember Rita Lamb, and the Cathedral City Fire Department for an Emergency Preparedness – Grab & Go Event from 11 a.m. to noon on Saturday, June 1, 2024, at the Cathedral City Library, Multi-Purpose Room, 33520 Date Palm Drive, Cathedral City. This event will provide information on how to respond to an emergency, such …

Read more
Emergency Preparedness Event
2024 Summer Series - Melissa Errico

CVRep's 2024 Summer Cabaret Series - Melissa Errico

June 5 & 6, 2024

Melissa Errico returns to the CVRep stage for two nights after her SOLD OUT 2023 Cabaret performance! In her new show “The Life & Loves ... Read more

Summer Movie Series 2024

June 14, 2024
Minions- The Rise of Gru
The Cathedral City Parks and Community Events Commission (PACE), in partnership with the Mary Pickford Theatre, presents the return of the “Free Summer Kids Movie Series” happening every Friday at 11:00 a.m. starting Friday, June 14, 2024, through Friday, August 2, 2024. Doors open at 10:30 a.m. The film series offers free admission to see a different movie geared towards kids … Read more

Employment

ASSISTANT CIVIL ENGINEER
CITIZENS ON PATROL (COP)

POLICE CADET
POLICE OFFICER - LATERAL/ACADEMY GRADUATE
POLICE OFFICER RECRUIT
PUBLIC SAFETY DISPATCHER - PART-TIME
PUBLIC SAFETY DISPATCHER I
PUBLIC SAFETY DISPATCHER II
RESERVE POLICE OFFICER
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