Assessors in Los Angeles, Riverside and San Bernardino counties are forecasting the first drops in property tax collections in more than a decade, presaging reduced revenues for many cash-strapped local governments.
Until now, property tax revenues had been a relatively stable source of money for cities amid a recession that has dramatically reduced sales tax intake, particularly from car dealers.
Even with the decline in home values, the property tax base in five Southland counties grew last year thanks to continuing sales and the completion of construction begun during the 2003-2006 building boom. But assessors in those counties said they have reduced the value of more than half a million properties and expect to make deeper cuts to their rolls by the summer.
This is bad news for local governments that have been relying on property tax proceeds to help make up the shortfall from reduced incomes and spending in their areas. Already, cities and counties across California have been freezing jobs, imposing work furloughs and pay cuts, postponing repairs and reducing some public services.
"Cities are calling us almost weekly now trying to find out where we are at and what kind of effects the reduced assessment will have on their budgets," said Larry Ward, Riverside County's assessor, clerk and recorder.
He said he won't make any predictions until the end of June, when the 2009 assessment roll is closed and submitted for audit.
But in Los Angeles County, Assessor Rick Auerbach is estimating a 1% reduction in the county's $1.1 trillion property tax base. It would be the first time the assessment roll has dropped since 1996, when counties were struggling to adjust property values after a deep recession triggered by major cuts in the local aerospace industry. Auerbach said the losses could grow in coming months.
San Bernardino County Assistant Assessor Dennis Draeger is predicting a 5.7% drop in the county's $182-billion roll. Orange County's $424-billion property tax base is currently projected to grow slightly, but Assessor Webster Guillory said it would be by a historically slim margin of 0% to 2%.
Early indications were that the Ventura County roll would stay flat at about $107 billion, but Assessor Dan Goodwin cautioned, "It is so early that it is difficult to have high confidence in that."
The reduced assessments mean counties collect less property tax, which was capped at 1% of assessed value when voters approved Proposition 13 in 1978.
