Prop 90 Helps Small Business and it is the Only Real Economic Development Program the County Provides

by Placerville Newswire / Sep 11, 2016 / comments

by Steve Ferry

El Dorado Hills, CA - I love reading things people say when operating from the governments side of an argument. Notice in the Mt Dem “Prop 90 unknowns” the author writes about the sales tax revenue increase under Prop 90 and says we don’t have enough data to make a determination that there is an increase. Ok, so let’s talk about what we do know. We do know that the 425 people who have come here from other counties are bringing some money with them. We know that they eat out often or buy cars or clothing. We know that the cars purchased in Folsom that the sales tax flows back to EDC (state law). Prop 90 helps small business and it is the only real economic development program the county provides. This is all really nice but what about the "Main Thing” that Prop 90 does? Property Taxes!!

Let’s talk about property values. If the property values in EDC drop as they did between 2006 and 2012 then we lose tax revenue on that drop. We went from 28.1 billion of assessed value in 2006 to 25.2 billion in 2012. The reduction in tax revenue was 1% of the difference or 1% of 2.9 billion dollars. That is 29 million dollars. the county gets 25% of that so we are out $7,250,000 and the agencies (fire, parks, education) are out the remainder. We still have 17,000 parcels that have not reached their 2006 values. There are 17,000 parcels that have not reached their 2006 values. The value of that unrestored assessed value is about $2.5 billion (Assessor's numbers).

Another factor to bring in is we have closed escrow on housing units that changed the assessment from farm/ranch assessment to housing. A move from $?? for ranch land to 1% of the value of the home sold and closed. This has increased the assessments in EDC to $29.8 billion. Sounds like a lot but don’t forget our BOS approved a 15% raise over three years raising the salary expenditure of the county from $118,000,000 to $153,000,000. Prices keep going up.

So, if you think that Prop 90 does not mitigate some of the downward spiral then get rid of it on the next go around. However, if you read the information as I do we should maintain Prop 90 until the 17,000 parcels have shrunk to 2,000 parcels. Then we know we have reached equilibrium. If you are trying to sell your home then Prop 90 may really help. It will certainly help the appraisers when they are looking for comparables.