The city says repeal of Proposition 4, “will not cause property taxes to increase or decrease.” Any property tax bill is calculated by multiplying the assessed value times the mill rate. If the mill rate stays the same, but mandatory reporting eventually increases your assessed value, then your tax bill will eventually go up by some amount.
The mill rate set by the Assembly has stayed about the same for some time, but last year’s total assessed value went up about 6%. So, with no increase in mill rate, the City still collected about 6% more in property tax revenue. Since most agree assessments are too low, mandatory disclosure will increase assessed values. If you bought property and paid 15% more than its assessed value, your tax bill will likely go up by some percentage in the next tax year. Why?
Mortgage payments include principle and interest, plus reserves for insurance and taxes. Tax calculations use past assessed values, not future increases likely because of mandatory reporting. So, young families barely able to afford their new mortgage payment will be faced with a higher-than-expected property tax bill increase unless voters approve Proposition 4.
At average sales rates, most properties won’t change hands for years. But if the Assembly keeps the mill rate stable and Proposition 4 fails, the City will still collect more property tax revenue due to a gradual increase in assessed valuation. Property tax rates may not change, but total revenue from property taxes will increase.