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MAJOR GENERAL FUND REVENUES <br /> <br />PROPERTY TAXES, cont. <br /> <br /> Supplemental Property Taxes <br />Supplemental Taxes are the result of the reassessment of property as of the 1 st day of <br />the month following either an ownership change or completion of new construction. In <br />most cases, this reassessment results in one or more supplemental tax bills being sent <br />to the property owner during the year, in addition to the annual property tax bill. <br /> <br />Vehicle In-lieu Tax/License Fees (VLF) <br />Motor Vehicle In-Lieu Tax (VLF) is a tax imposed by the State on the ownership of a <br />registered vehicle in lieu of personal property tax. VLF is collected by the State <br />Department of Motor Vehicles (DMV) and more than 95% of these fees are divided <br />equally between counties and cities, and their aggregate shares are distributed in <br />proportion to the respective populations of the cities and counties. The State withholds <br />less than 5% of these fees for the support of the Department of Motor Vehicles. Until <br />1998-99, the annual license fee was 2% of the market value of the vehicle as determined <br />by the DMV. In 1998-99, the State reduced the license fees by 25%, but agreed to backfill <br />local jurisdictions for this loss in revenue. <br /> <br />In 2004, the Governor lowered the annual VLF to 0.65%, from 2%. In the budget <br />agreement between the Governor and cities and counties, the Go vernor agreed to backfill <br />the 1.35% difference in VLF with property taxes from the Education Revenue <br />Augmentation Fund (ERAF). Beginning in 2005 -06, this property tax in lieu of VLF was <br />presumed to grow at the same rate as the change in gross assessed valu ation of taxable <br />property in the City from the prior year. <br />55 <br />77