July 21, 2022

Community Update
by Tami Scott, Administrative Services Director

You’ve 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 finances?

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 with regard to the property tax. Local governments still have wide latitude on the spending of the remaining revenues they receive, but the allocation of the tax is controlled by the State Legislature.

Six Provisions of Proposition 13 Affecting Local Finance

One percent rate cap. Proposition 13 capped, with limited exceptions, property tax rates at 1 percent of full cash value at the time of acquisition. Prior to Proposition 13, local jurisdictions independently established their tax rates.
Assessment Rollback. Proposition 13 rolled back property values as determined for tax purposes to their Fiscal Year 1975-1976 level.
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.
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 the jurisdiction.
Voter approval for special taxes. Proposition 13 requires two-thirds voter approval for property taxes raised by local governments for a designate “special” purpose.
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 have to go back to the voters.

Finally, the amount of property taxes allocated to local governments depend 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 that were 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 that provided many government services, including police and fire protection, park and recreation programs, and water services, typically receive more property tax revenue than governments that relied on special districts to provide some or all of 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.

In practical terms, this means that neighboring cities of a similar size (like Palm Springs and Cathedral City) may receive significantly different property tax allocations. For example, in Fiscal Year 2021-22, Palm Springs was allocated $28.7 million dollars in property tax revenues while Cathedral City received only $5.1 million. This makes it more difficult for Cathedral City as a post Prop 13 city to provide the same level of services as a similarly sized city that incorporated before Prop 13.

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Cathedral City's 2022-23 Banner Program
Along East Palm Canyon Drive

For the last 6 years, the City of Cathedral City has implemented a Sponsored Banner Program in the Downtown Corridor. Beginning on November 1, 2022, Downtown Cathedral City will transform into a spectacular art-scape of brightly colored banners promoting the City of Cathedral City. The banners will remain up through October 31, 2023 (one year). As a business, you have … Read more

Parks and Recreation Survey

Share your priorities for Cathedral City parks and recreation – Take our community survey to share your thoughts. Tinyurl.com/CCParksSurvey

Jurassic Wonders Instagram Photo Contest
Starts June 10th

Jurassic Wonders Instagram Photo Contest Starts June 10th Winner receives a private movie showing at the Mary Pickford Theatre for up to 20 people The Cathedral City Public Arts Commission is hosting a Jurassic Wonders Photo Contest this summer in celebration of Universal Studio’s Jurassic World Dominion movie being released on June 10th. To enter this Instagram photo contest, contestants … Read more

Free Movies for the Kids This Summer

The Cathedral City Parks and Community Events Commission, in partnership with the Mary Pickford Theatre, presents a “Free Summer Kids Movie Series” happening every Thursday at 11:00 a.m. starting Friday, June 16, 2022, thru Friday, August 4, 2022. The film series offers free admission in order to see a different movie geared towards kids each Friday morning at the Mary … Read more

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Events

2022 Summer Pool Event

The City of Cathedral City, Palm Springs Unified School District, and Desert Recreation District offers public swimming at Cathedral City High School this summer starting June 6 through August 6, 2022. Below are the scheduled swim times and prices: Cathedral City High School Pool, 69-250 Dinah Shore Drive, Cathedral City Contact: (760) 347-3484 and ask for Aquatics Department Entry Fees … Read more

Free Movies for the Kids This Summer

The Cathedral City Parks and Community Events Commission, in partnership with the Mary Pickford Theatre, presents a “Free Summer Kids Movie Series” happening every Thursday at 10:30 a.m. starting Thursday, June 16, 2022, thru Thursday, August 4, 2022. The film series offers free admission in order to see a different movie geared towards kids each Thursday morning at the Mary … Read more

Tejano Music Festival

Tejano PowerHouse Entertainment, City of Cathedral City and Diaz Enterprises invites you to the rescheduled 4th annual Tejano Music Fest in Cathedral City featuring the best Tejano music, fiesta food and spirits on Saturday, October 29, 2022 from 5 pm to 10 pm at our new location, the Cathedral City Community Amphitheater, 68526 Avenida Lalo Guerrero, in Cathedral City, California. … Read more

Halloween Spooktacular

Cathedral City’s Halloween Spooktacular features trick or treating with over 40,000 pieces of candy! Join friends, neighbors, and family for a Spooktacular time including activities such as Halloween costume contests (two bikes given away each hour), police and fire exhibitions, music, and family games. Halloween Spooktacular provides you with information about the police and fire departments, to view special … Read more