FISCAL YEAR 20
2 3
TAX APPROPRIATIONS LIMIT
Executive Summary
FY 20
2 2
/2
3 Tax Appropriations Subject to the Tax Appropriations Limit
Ten
-
Year History of Price and Population Factors and Tax Appropriations Limits
Price and
Population Information
ATTACHMENT 2
Fiscal Year
202
2 /2
3 Tax Appropriations Limit
Executive Summary
In November 1979, California voters approved Proposition 4 (the Gann Initiative) and added Article XIIIB to the California State Constitution.
In 1980, the State Legislature
added Division 9
(commencing with Section 7900) to Title I of the Government Code to implement Article XIIIB.
This legislation required the governing body of each local jurisdiction in California to establish a Tax Appropriations Limit (also referred to as the GANN Limit)
on or before June 30 of each year for the following fiscal year.
The Tax
Appropriations Limit is based on actual appropriations during the State of California Fiscal Year 1978
/
79 and adjusted each year using population and inflation adjustment factors.
On
June 5, 1990, California voters approved Proposition 111, amending Article XIIIB.
Proposition 111 allows local jurisdictions to choose among measures of inflation and population growth to compute and adjustment factor.
The measures for inflation (price
fa
ctors) include growth in California per capita income or growth in the City’s gross assessed valuation due to new non
-
residential construction; while measures for
population growth include population growth within the county or city.
The proposed Tax Appr
opriations Limit for Fiscal Year
2022/23
is $
569,554,482
.
In
accordance with Proposition 111 guidelines, the Fiscal Year 2022/23
Tax
Appropriations Limit was calculated by adjusting the prior year’s Tax Appropriations Limit using one of the adjustment fact
ors.
The recommended Fiscal Year
2022
/23
adjustment factor was calculated using the
percentage change in
CPI
(
7.55 %) and the
population factor based on the percent growth in the C
i
ty’s population (
-
0.98 %),
resulting in an adjust
ment factor of 1.
065
.
The use of this adjustment factor results in a
Tax Appropriations Limit for Fiscal Year
202
2/23
of
$
569,554,482
;
a
6.497
% increase
over the Fiscal Year
2021/22
Tax Appropriations Limit of
$
534,807,381
.
The Tax Appropriations Limit does not apply to all City revenues, or all General Fund revenues, but only to proceeds of taxes including property tax, sales tax, transient occupancy tax, motor vehicle license fees, and other local taxes, less the amount pai d
in debt service on both voter approved debt and qualified capital outlays (a fixed asset, including land, with a useful life of more than 10 years and a value that equals or ATTACHMENT 2
Fiscal Year
202
2 /2
3 Tax Appropriations Limit
exceeds $100,000).
Other revenues, including fees, licenses and permits, rents a nd
concessions, and inter
-
fund transfers are not subject to the limit.
The Fiscal Year
202
2/23
Adopted budget projects the tax appropriations subject to the Tax Appropriations Limit to be $
108.37
million.
The projected appropriations subject to the
limit ar
e estimated to be approximately $
461.18
million below
the recommended limit of
$
569,554,482
.
ATTACHMENT 2
Fiscal Year
202
2 /2
3 Tax Appropriations Limit
FY
202
2/23
Tax Appropriations Subject to the Tax Appropriations Limit
Appropriations Subject to the Tax Appropriations Limit
FY 2022/23
Adopted Budget
Property Tax
45,676,000
Sales Tax
(excluding Prop 172)
27,869,890
Business License Tax
3,651,200
Transient Occupancy Tax
(excluding Tourism Improvement District)
30,218,000
Real Property Transfer Taxes
500,000
State Mandate Reimbursements
10,000
Other Discretionary State Grants and Aid
449,500
Interest Earnings (on proceeds of taxes)
1,062,811
Total Unadjusted Appropriations subject to the Limit
[A]
109,437,401
Adjustments for appropriations not subject to the Tax Appropriations Limit Annual Debt Service for Voter Approved Debt
-
Total Annual Debt Service
[B]
-
Qualified Capital Outlays
Total Qualified Capital Outlays
[C]
-
Total Adjustments [D = B + C]
[D]
-
Total Adjusted Appropriations subject to the Limit [E = A - D] [E]
109,437,401
Calculation of the Tax Appropriations Limit and Difference between the Limit and Appropriations Subject to the Limit Prior Year (FY 2021/22) Tax Appropriations Limit
[F]
534,807,381
Adjustment Factor
[G]
1.0650
Tax Appropriations Limit for FY 2022/23 [H = F x G]
[H]
569,554,482
Projected appropriations are below the limit by [I = H - E] [I]
460,117,081
ATTACHMENT 2
Fiscal Year
202
2 /2
3 Tax Appropriations Limit
Ten Year History of Price and Population Factors & Tax Appropriations Limits for Fiscal Years
2013/14
through
2022/23
Fiscal
Year
Price
Adjustment
Population
Adjustment
Total
Adjustment
Appropriations
Limit
2013/14
1.2398
x
1.0047
=
1.2456
388,279,584
2014/15
1.1151
x
1.0038
=
1.1193
434,599,992
2015/16
1.0382
x
1.0094
=
1.0480
455,447,106
2016/17
1.0537
x
1.0203
=
1.0751
489,658,157
2017/18
1.0006
x
1.0369
=
1.0376
508,054,206
2018/19
1.0067
x
0.9972
=
1.0038
510,009,935
2019/20
1.0085
x
0.9999
=
1.0085
514,321,628
2020/21
1.0373
x
0.9943
=
1.0314
530,481,309
2021/22
1.0033
x
1.0048
=
1.0082
534,807,381
2022/23
1.0755
x
0.9902
=
1.0650
569,554,482
ATTACHMENT 2