City of Morgan Hill Adopted Budget FY 2016-17 and FY 2017-18

 CITY OF MORGAN HILL  FY 16-17 and 17-18  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 16-17 and 17-18  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 16-17 and 17-18  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  CITY OF MORGAN HILL  FY 16-17 and 17-18  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 16-17 and 17-18  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY16-17 and 17-18  Major Revenue Assumptions General Fund (010) FY 16-17 and 17-18 revenues for the General Fund, including transfers in, are estimated to be $36.2 million and $37.1 million, respectively. General Fund revenues continue the upward trajectory as the City has recovered from the economic downturn. In general, the FY 16-17 and 17-18 Budget estimates that most revenues will experience growth over the next five years. Sales Tax Sales tax is imposed on retailers for selling tangible personal property in California. The use tax is imposed on the user of a product purchased out-of-state and delivered for use in California. The sales and use tax rate for Santa Clara County is 8.75 percent. Sales tax, at $8.8 million or 24 percent of the total General Fund revenue projected for FY 16-17, is the second largest revenue source for the City’s general fund. This revenue source is anticipated to increase by $0.4 million to $9.2 million in FY 17-18. Subsequent forecast years assume steady annual growth. Property Tax Property tax is imposed on real property (land and permanently attached improvements such as buildings) and tangible personal property (movable property) located within the State, based on the property value rather than on a fixed amount or benefit. Properties are distinguished as secured and unsecured—property for which the value of the lien is not sufficient to assure payment of the tax. Article XIIIA of the State Constitution limits the real property tax rate to 1 percent of the property’s assessed value plus rates imposed to fund indebtedness approved by the voters. Morgan Hill’s share of the 1 percent is equivalent to 10 cents for every $1.00 collected from property taxes. With the passage of Prop 13 in 1978, assessed valuations are limited to a 2 percent increase each year. Property tax is projected at $10.0 million or 28 percent of the total General Fund revenues for FY 16-17. It is anticipated to grow to $10.1 million in FY 17-18. Included in the total projected property tax revenue are the secured and unsecured taxes, RPTTF Residual Distribution, VLF In- Lieu of Property Tax, Former RDA Pass Through, and Supplemental Property Taxes. $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 Sales Tax Revenue $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 Property Tax Revenue 44% SchoolK-12 12% County 11% RPTTF* 10% City of MH 7% Comm. College 6% Special District 10% Other *RPTTF=RedevelopmentProperty TaxTrust Fund 6.5% State 1.0% City of MH 0.5% VTA MeasureA 0.5% 1976 Transit 0.125% VTA MeasureB 0.125% County MeasureA Allocationof Sales Tax Rate (Current Sales Tax Rate 8.75%)

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