FISCAL YEAR 20
2 4
TAX APPROPRIATIONS LIMIT
Executive Summary
FY 20
2 3/24
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
2023/24
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
2023/24
is $
589,380,150
.
In
accordance with Proposition 111 guidelines, the Fiscal Year 2023/24
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
2023/24
adjustment factor was calculated using the
percentage change in
CPI
(
4.4 4
%) and the
population factor based on the percent growth in the C
i
ty’s population (
-
0.9 2
%),
resulting in an adjustment factor of 1.
0 35
.
The us
e of this adjustment factor results in a
Tax Appropriations Limit for Fiscal Year
2023/24
of
$
589,380,150
;
a
3.48 % increase
over the Fiscal Year
2022/23
Tax Appropriations Limit of
$
569,554,482
.
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
2023/24
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
2023/24
Adopted budget projects the tax appropriations subject to the Tax Appropriations Limit to be $
120.73
million.
The projected appropriations subject to the
limit a
re estimated to be approximately $
468.7
million below
the recommended limit of
$
589,380,150
.
ATTACHMENT 2
Fiscal Year
2023/24
Tax Appropriations Limit
FY
2023/24
Tax Appropriations Subject to the Tax Appropriations Limit
Appropriations Subject to the Tax Appropriations Limit
FY 2023/24
Adopted Budget
Property Tax
46,504,550
Sales Tax
(excluding Prop 172)
31,513,700
Business License Tax
4,099,770
Transient Occupancy Tax
(excluding Tourism Improvement District)
35,430,000
Real Property Transfer Taxes
525,000
State Mandate Reimbursements
10,000
Other Discretionary State Grants and Aid
1,536,790
Interest Earnings (on proceeds of taxes)
1,106,578
Total Unadjusted Appropriations subject to the Limit
[A]
120,726,388
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]
120,726,388
Calculation of the Tax Appropriations Limit and Difference between the Limit and Appropriations Subject to the Limit Prior Year (FY 2022/23) Tax Appropriations Limit
[F]
569,554,482
Adjustment Factor
[G]
1.0348
Tax Appropriations Limit for FY 2023/24 [H = F x G]
[H]
589,380,150
Projected appropriations are below the limit by [I = H - E] [I]
468,653,762
ATTACHMENT 2
Fiscal Year
2023/24
Tax Appropriations Limit
Ten Year History of Price and Population Factors & Tax Appropriations Limits for Fiscal Years
20 14/15
through
2023/24
Fiscal
Year
Price
Adjustment
Population
Adjustment
Total
Adjustment
Appropriations
Limit
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
2023/24
1.0444
x
0.9908
=
1.0348
589,380,150
ATTACHMENT 2
May 20
23 Dear Fiscal Officer:
Subject: Price Factor
and Population Information
Appropriations Limit
California Revenue and Taxation Code
section 2227 requires
the Department of
Finance
(Finance)
to transmit an estimate of the
percentage change in population to local governments.
Each local
jurisdiction must use their percentage change in population factor for January 1, 20 23 , in
conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 20
23-24.
Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 20
23-24
appropriations limit. Attachment B provides
the
city and unincorporated
county population percentage change. Attachment C provides the
population percentage
change for counties and th
eir summed incorporated areas.
The population percentage change
data exc
ludes federal and state institutionalized populations and military populations.
Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and
Taxation Code section 2228
provide
s additional information regarding the appropriations limit.
Article XIII B,
s
ection 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate.
The code section
and the California Constitution can
be accessed at
the following website:
http://leginfo.legislature.ca.gov/faces/codes.xhtml
.
Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their
county
,
district legal counsel,
or
th
e law itself.
No state agency reviews the local
appropriations limits.
Population Certification
The population certification program applies only to cities and counties. California Revenue and
Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office.
Finance
will certify the higher estimate to the State Controller b y June 1, 20
23 .
Please Note
: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.
If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.
JOE SPEPHENSHAW
Director
By:
Erika Li
Chief Deputy Director
Attachment
ATTACHMENT 2
May 20
23 Attachment A
A.
Price Factor
: Article XIII B specifies that local jurisdictions select their cost of
living
factor to compute their appropriation limit by a vote of their governing body.
The
cost of
living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be use
d in setting the
fiscal year
2023-24
appropriation limit is:
Per Capita Personal Income
Fiscal Year
Percentage change
(FY)
over prior year
20 23-24
4.44 B.
Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 20 23-24
appropriation limit.
202
3-24:
Per Capita Cost of Living Change =
4.44 percent
Population
Change
=
-
0.3 5
percent
Per Capita Cost of Living converted to a ratio:
4.44 +
100
= 1.0
444
1 00
Population converted to a ratio:
-
0. 35
+
100
=
0 .99
65 1
00 C
alculation of factor for FY 202
3-24:
1.0444
x
0. 99
65 =
1.0 4
07 ATTACHMENT 2
Fiscal Year 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 Total
County
Percent Change
--- Population Minus Exclusions --
-
Population
City
2022-2023
1-1-22
1-1-23
1-1-2023
Napa
American Canyon
-1.35
21,631
21,338
21,338
Calistoga
-0.68
5,162
5,127
5,127
Napa
-0.92
77,533
76,821
76,821
St Helena
-0.46
5,380
5,355
5,355
Yountville
-0.86
2,211
2,192
2,778
Unincorporated
-1.10
22,357
22,112
23,218
County Total
-0.99
134,274
132,945
134,637
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.
ATTACHMENT 2
Fiscal Year 2023-24
Attachment C
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023
County
Percent Change
2022-23
--
-
Population
1-1-22
Minus
Exclusions --
-
1-1-23
Napa
Incorporated
County Total
-0.97
-0.99
111,917
134,274
110,833
132,945
Nevada
Incorporated
County Total
0.25 -0.26
33,423
100,926
33,506
100,667
Orange
Incorporated
County Total
-0.46
-0.46
3,018,568
3,151,305
3,004,808
3,136,922
Placer
Incorporated
County Total
0.59 0.21
296,653
409,441
298,408
410,305
Plumas
Incorporated
County Total
-1.64
-1.23
2,129
19,232
2,094
18,996
Riverside
Incorporated
County Total
0.24 0.34
2,024,892
2,423,020
2,029,837
2,431,270
Sacramento
Incorporated
County Total
0.44 -0.02
965,442
1,568,532
969,714
1,568,233
San Benito
Incorporated
County Total
0.53 0.19
44,674
65,543
44,913
65,666
San Bernardino
Incorporated
County Total
0.20 0.12
1,860,675
2,150,981
1,864,456
2,153,467
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.
ATTACHMENT 2