As the largest city within Sacramento County, the city of Sacramento is driving the majority of the shift of parcels from Prop-8 back to Prop-13
Folsom, CA (PRWEB) October 11, 2014
The overall assessed value of secured parcels in Sacramento County as of the current 2014/2015 closed roll period is $126.5 Billion – an improvement of +$7.5 Billion over the 2013/2014 closed roll period. This is the second straight year that Sacramento County has experienced an increase in their overall secured assessed values. Factors contributing to Sacramento County’s tax roll increase are likely twofold:
First, the value of secured parcels currently enrolled in Prop-13 have increased by $18 Billion (+24%) - from just over $75 Billion a year ago, to just over $93 Billion in the current closed roll period. The percentage of parcels enrolled in Prop-13 now stands at 81.5% - an increase of +12.3 points from 69.2% a year ago.
Secondly, the percentage of parcels enrolled in Prop-8 has decreased from 30.8% a year ago, to just over 18% this year. Additionally, the average value of a Prop-8 parcel has increased from $13,863 a year ago, to $38,890 in the current closed roll period. Many of the residential parcels that were moved into Prop-8 status at the start of the real estate crash are continuing to inch back to their Prop-13 factored base year values.
While Prop-13 restricts growth of a parcel’s assessed value to 2% annually unless a change in ownership occurs, Prop-8 parcels are tied to fluctuations in the real estate market and can, as a result, adjust up or down much more radically and without limit. The shifting of secured parcels from Prop-8 back to Prop-13 status is a welcome shift from the 2012-2013 closed roll period when Prop-8 parcels comprised over 50% of the county’s total assessed parcel values. This dramatic change signals stabilization in the market and suggests that the losses in property tax revenue experienced at the height of the market crash continue to be recovered.
Just over 28% of Sacramento County’s overall assessed value increase can be attributed to a large increase in the value of secured parcels in the city of Sacramento, as assessed values have increased +$2.1 Billion (+5.7%) in the current roll period. The remainder of secured assessed parcel increases in Sacramento county are primarily driven by improvements in Elk Grove (+$1.5 Billion), Folsom (+$753 Million), Citrus Heights (+$321 Million), and Rancho Cordova (+$303 Million). The aforementioned cities collectively represent just over 62% of the total secured assessed parcel value in Sacramento County.
As the largest city within Sacramento County, the city of Sacramento is driving the majority of the shift of parcels from Prop-8 back to Prop-13 as the overall number of Prop-8 parcels dropped from 42,312 a year ago to 26,011 in the current roll period. Prop-8 parcels now represent only 17% of the city of Sacramento’s tax roll, compared to 28% a year ago. In the city of Elk Grove, Prop-8 parcel counts are also down – from just over 20,000 a year ago to 12,280 in the current roll period. Prop-8 parcel counts have also been nearly trimmed in half in Citrus Heights (-43%), Folsom (-49%), and Rancho Cordova (-40%).
As the real estate market continues to stabilize and market values creep closer to their factored base year values, counties will continue the trend of assessing those parcels under the guidelines of Prop-13. As a result, the tax roll will continue to stabilize and grow. This is excellent news for various cities and districts that largely depend on increases in property tax revenue to fund new development projects.
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