Did you know?
Many property owners in California believe that taxes levied by cities and school districts will be reduced once an appeal is successfully filed with the County Assessor and the assessed value of their property is adjusted. While this may be true for taxes levied to repay certain types of debt (i.e., general obligation bonds) for other types of obligations which are secured by special assessments such as Mello-Roos (CFD), and assessment districts (1915 Act) a reduction in the property value will typically NOT change the amount of the tax being assessed against the property. These special assessments are generally based on the benefit the property will derive from the public improvements for which the tax or assessment is being levied. In many cases, state law specifically prohibits the assessment from being based on property value.
What Do my Taxes Pay For?
Special assessments or special taxes typically are used to repay bonds that have been issued to construct or acquire public improvements that benefit the properties being taxed. In some cases taxes may be used to pay directly for the public improvements thereby reducing or eliminating the need to issued debt and fund borrowing costs. These public improvements include streets and lighting, water and drainage systems, schools, public parks and library facilities. Additionally, some Maintenance Districts and Mello-Roos Districts may also provide for the funding of certain services such as the maintenance of lighting, parkways and medians as well as some emergency services such as police and fire protection.
May I prepay my assessment or special tax?
Assessments authorized under the 1915 Act can always be prepaid in full. Depending on the tax formula, Mello-Roos taxes levied for facilities may be paid in part or full, in full only or not prepaid at all. Mello-Roos taxes and certain maintenance assessments levied for services are typically levied into perpetuity and may not be prepaid. If you need to determine whether or not your tax or assessment can be prepaid and SDFA is the administrator for your special district please contact our office and we can determine whether or not your charge can be prepaid and we will provide you with a payoff quote. Please note that there may be a charge for this service.
Financing of Public Projects
The challenges of financing public improvements goes back two millennium when the Romans extracted funds from their citizens to pay for the construction of the earliest aqueducts and roads which ineveitably made life easier and more convenient for all.
In California, assessment law allowing for the creation of liens and levy of assessments against certain properrty owners in order to fund necessary public projects was first approved in 1915. More recently, the Landscape and Lighting Act of 1972 provided a means to pay for maintenance of certain public improvements and the Mello-Roos Act of 1982 provided a mechanism to finance public projects in a post Proposition 13 environment.
SDFA has worked with municipalities throughout California in order to best implement the provisions of these laws in such a way as to minimize the impact on the affected properties owners and best leverage the resulting taxes to maximize the agencies' ability to fund and construct the necessary improvements.
Even as municipalities have come to depend on special districts more and more, SDFA has been proactive in drafting tax formulae and structuring assessments to avoid the pitfalls of an overburdened citizenry. Tax deferrals for seniors, special tax buydown provisions and lower borrowing costs as a result of general obligation debt issues are all strategies that have been employed in order to ensure that special district formations and land-secured financings continue to remain a viable option in order to fund a portion of the public improvements necessary to serve new communities.