Your Supervisor Says …
By Zach Friend, 2nd District Supervisor
In this article I wanted to give our district an overview of the County budget. Where do the revenues come from? How are our taxes spent? And why are our roads deteriorating and why don’t we have more Sheriff’s Deputies on the streets? After all, our property taxes are going to the County and shouldn’t they be funding these vital services?
These are excellent questions and ones that actually have a more complex answer than it might seem. The County has a different funding structure than cities. In fact, nearly 55 percent of all county revenues come from the state and federal government. These funds are generally pass-through funds to provide state and federally mandated services. In other words, these funds are not generally used to fix the roads or pay for our Sheriff’s Department.
Approximately 22 percent of the county revenue comes from local taxes. And while property taxes make up about half of that 22 percent, you may be surprised to learn how little of your property tax dollar goes to the County.
For every one dollar the county collects in property taxes, it is only allowed to keep approximately 13 cents.
So where does the rest of your property tax go to? The largest share, about 57% goes to schools while another 17% goes to local special districts, cities and the libraries. As property taxes decline so too does the relative amount the county collects to pay for roads and public safety.
What about sales tax?
About 1 percent of local sales tax collected stays within the jurisdiction where it was spent. For example, assuming an 8.25 percent County sales tax here is the breakdown:
5.25 percent goes to the state; 1.25 percent goes to local libraries, the Metro and regional transportation projects; 0.5 percent is for Prop 172 local public safety mandates, 0.5 percent is for local health and social services which leaves 1 percent to pay for general purposes in the jurisdiction in which the tax was collected.
I know this is a bit complex, but it helps show the difficult context by which County budgeting exists.
How Are County Funds Spent?
Now let’s look at how the County’s funds are spent. Approximately 33 percent is spent on health and sanitation services with another 26 percent spent on human services. Most of these human, health and sanitation expenditures are state and federal government mandates. The largest portion of the county’s discretionary spending is for public protection (Sheriff’s Dept. and County Fire), which is 30 percent. Only 1 percent of County funding is dedicated to parks and open space. The remainders of the funds are spent on debt services, general government functions or are held in contingency/reserve.
What are the Next Steps to Ensure Stable Funding?
Many areas of the 2nd District, especially Aptos, Rio Del Mar and Seacliff are urban areas that rely on a County funding structure that is designed for rural areas. Most counties are set up to provide state and federal services and rural public safety and road services. However, the density of the 2nd District demands a greater service level than the current County funding structure can adequately provide. Given that the state and federal government are requiring counties to take over more responsibilities (for example prison realignment), it is unlikely that more funding will come from these governmental sources to address our local needs.
Dedicated road or public safety taxes are an option but are difficult to adopt in this economic climate.
Other options include:
- Increasing the tax base by making economic development more attractive
- Regionalization of certain service deliveries in order to reduce replication and inefficiencies
- Allowing for and encouraging the creation of more private neighborhood road associations
- Lobbying the state for more equitable distribution of sales and property taxes back to the counties.
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Do you have some suggestions? I’d love to hear from you. Give my office a call at 454-2200.