Impacts

1. Property tax return to cities ranges from 2.8% (Rancho Cucamonga), 4% in Chino Hills, 10% in Moreno Valley to 40% (Barstow) with the average around 12%.
2. Utility user taxes imposed in many jurisdictions.
3. Property tax return covers only a small percentage of public safety (police and fire) costs.
4. Significant revenue differences exist between cities making solutions difficult.
5. Sales tax revenue reliance is poor public policy:
   • Land use decisions driven by commercial uses;
   • Industrial/housing designated land often changed to commercial;
   • Growth in Internet and catalog sales threaten sales tax revenue;
   • Competition between jurisdictions benefits companies and hurts communities;
   • Cities pursue sales tax revenue growth because they have some control.
6. New cities facing the need to install infrastructure without revenues.
7. Numerous assessment districts being used in newer cities.
8. Proposition 218 has caused landscape and lighting districts to be absorbed, abandoned or threatened. Many cities highly reliant (R.C. gets $13 million annually from these districts).
9. Moratorium on new development has been discussed in Chino Hills.
10. Redevelopment agencies vary drastically. Many cities rely on them to promote and subsidize retail and other communities do not even have redevelopment agencies. This adds to the difficulty some cities have competing with their neighboring cities for revenue producers.
11. Cut backs in many cities reduce library hours, parks and recreation programs and significantly hurt employee morale which leads to poorer service (Riverside has lost 450 employees, Rancho Cucamonga lost 20 in one year).
12. Revenue sources unpredictable.
13. Revenue sources tend to decrease as demands increase.
14. Funding for infrastructure lags well behind the revenue to provide it.
15. High growth/low cost communities often have less revenue but require more services.
16. Disconnect exists between land use planning and transportation planning.
17. Every new home in Chino Hills will create a $141 deficit in that City's annual budget.

Potential Solutions Discussed:

1. Endowment on new homes to offset costs?
2. Should cities be allowed to subsidize retail? What is the alternative revenue source?
3. Infrastructure planning should be ahead of need, not behind it.
4. Incentivize wealth producing industries.
5. Do not rely solely on property tax revenue.
6. Moratorium on new home construction.