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MAJOR GENERAL FUND REVENUES <br /> <br />PROPERTY TAXES <br /> <br />Property Tax revenues are the City’s second largest General Fund revenue source. <br /> <br />Real Property Taxes <br />Under the State Constitution, Real Property Taxes (Property Taxes) are applied to all <br />taxable real and personal property (i.e., possessory interest, and other personal property <br />considered to be permanently attached to the prope rty), and are set at 1% of the assessed <br />value. The Alameda County Assessor maintains property tax assessment rolls that <br />account for all property. Property Taxes are adjusted based on the following: <br /> <br /> The assessed value of real property that has not changed ownership increases by <br />the change in the California Consumer Price Index up to a maximum of 2% per <br />year. <br /> <br /> Property that changes ownership; is substantially altered; is newly constructed; <br />“state-assessed” rather than “local-assessed” property; and personal property (i.e., <br />possessory interest, and other personal property considered to be permanently <br />attached to the property), is assessed at the full market value in the first year, and <br />subject to the 2% cap, thereafter. <br /> <br />In 1979, in order to mitigate the loss of Property Tax revenues after approval of <br />Proposition 13, the State legislature approved AB 8. This action was approved to provide <br />a permanent method for allocating the proceeds from the 1% property tax rate, by <br />allocating revenues back to local governments based on their historic shares of property <br />tax revenues. As part of the State’s 1993-94 budget, the AB 8 formula was altered <br />requiring another ongoing shift in City Property Tax revenue to K -12 schools and <br />community colleges (Education Revenue Augmentation Fund or ERAF). <br /> <br />Proposition 1A, enacted in November 2004 and Proposition 22, enacted in November <br />2010, provides protection for local property taxes, sales taxes, and Vehicle In-lieu <br />Tax/License Fees (VLF) revenues by prohibiting the State Legislature from taking any <br />action that would: <br /> <br /> Reduce the local Bradley-Burns Uniform Sales and Use Tax rate or alter its <br />allocation. <br /> Decrease VLF revenue from the 0.65% rate without providing replacement <br />funding. <br /> Shift property taxes from cities, counties or special districts . <br /> <br />The City’s Property Tax is collected by Alameda County. The City currently receives <br />approximately 12% of the 1% countywide real property tax levied, and most of the <br />revenue is received in December and April. <br /> <br /> <br />54 <br />76