General Fund Revenue
Property Taxes

Article XIIIA of the State Constitution (Proposition 13) provides that property is assessed at its 1975 fair market value until it changes ownership. When ownership changes, the assessed value is redetermined based on the property's current market value. New construction is assessed at fair market value when construction is completed. A property's base year value may be increased by an inflation factor, not to exceed two percent annually.

Although the property tax is generally considered a local revenue source, the amount of property tax generated each year has a substantial impact on the state budget because local property tax revenues allocated to K-14 schools offset General Fund expenditures. Assessed value growth is estimated based on twice-yearly surveys of county assessors and evaluation of real estate trends. Assessed value is estimated to grow 9.3 percent in 2007-08 and 7.1 percent in 2008-09.

Property taxes received by school districts and reflected in the Department of Education and Community Colleges budgets are significantly below projections used for the 2007-08 Budget. While a recent audit performed by the State Controller (SCO) indicates local allocations of revenues are being performed correctly, the audit did not provide clear indications regarding the reasons why school property tax receipts are less than estimated using assessed value growth. Comparing actual 2006-07 revenues to estimates show supplemental roll revenues (new assessments added after the March 1 lien date) were $181 million less than estimated, but prior year tax collections made up $97 million. The SCO audit indicated that $100 million in more Educational Revenue Augmentation Fund in three counties was shifted to cities and counties than was estimated. The remaining gap is as yet unexplained.
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CHAPTER HIGHLIGHTS for Revenue Estimates Back to Top

 General Fund Revenue
  Personal Income Tax
  Sales and Use Tax
  Corporation Tax
  Insurance Tax
  Alcoholic Beverage Taxes
  Cigarette Tax
 image of black pointing arrowProperty Taxes
  Estate/Inheritance/Gift Taxes
  Other Revenues
 Special Fund Revenue
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Revenue Estimates (pdf * - 540K) -
Provides this entire Revenue Estimates Chapter in pdf format.

SCHEDULE 2 - Summary of State Tax Collections (pdf * - 113K) -
State Tax Collections per capita and per $100 of personal income.

SCHEDULE 3 - Comparative Yield of State Taxes (pdf * - 116K) -
Revenues for Major State Taxes from 1970-71 through 2008-09.

SCHEDULE 8 - Comparative Statement of Revenues (pdf * - 18K) -
Detail of General and special fund revenues by source for the past, current, and budget years within the following categories: (1) major taxes and licenses, (2) minor revenues, and (3) transfers and loans.