Operating and CIP Budget Fiscal Year 2015-16

Major Revenue Assumptions General Fund (010) FY 15-16 revenues for the General Fund, including transfers in, are estimated to be $33.7 million. General Fund reve- nues continue its upward trajectory as the City has recov- ered from the economic downturn. In general, the FY 15- 16 Adopted Budget estimates that most revenues will ex- perience growth over FY 14-15. Sales tax is imposed on retailers for selling tangible per- sonal property in California. The use tax is imposed on the user of a product purchased out-of-state and delivered for use in California. The sales and use tax rate for Santa Clara County is 8.75 percent. Sales tax, at $8.7 million or 26 percent of the total Gen- eral Fund revenue projected for FY 15-16, is the second largest revenue source for the City’s general fund. FY 15- 16 sales tax revenue is estimated to increase by roughly 9 percent over year end projections largely due to the termination of the “triple flip”, a sales tax maneuver used by the State to balance its 2004 budget. Subse- quent forecast years assume an average annual growth just above 4 percent beginning in FY 15-16. Sales Tax

Article XIIIA of the State Constitution limits the real prop- erty tax rate to 1 percent of the property’s assessed value plus rates imposed to fund indebtedness approved by the voters. Morgan Hill’s share of the 1 percent is equivalent to 10 cents for every $1.00 collected from property taxes. With the passage of Prop 13 in 1978, assessed valuations are limited to a 2 percent increase each year. Property tax is projected at $8.9 million or 26 percent of the total General Fund revenues. Included in the total pro- jected property tax revenue are the secured and unse- cured taxes, RPTTF Residual Distribution, VLF In-Lieu of Property Tax, Former RDA Pass Through, and Supplemen- tal Property Taxes.

 CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP

Property Tax Revenue

$8 $9 $10 $11

$0 $1 $2 $3 $4 $5 $6 $7

FY 10-11

FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20

MorganHill Property Tax 1% Distribution

.08% VLF-Morgan Hill

Sales Tax Revenue

$8 $9 $10 $11

3.92% VLF-

Other Cities

$0 $1 $2 $3 $4 $5 $6 $7

6% VLF- County

44% SchoolK-12

7% Comm. College

12% County

11% RPTTF

6% Special District

10% City of Morgan Hill

FY 10-11

FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20

Allocation of Sales Tax Rate (Current Sales Tax Rate 8.75%)

Property Tax

0.125% VTA MeasureB

0.125% County MeasureA

0.5% 1976 Transit

Property tax is imposed on real property (land and perma- nently attached improvements such as buildings) and tan- gible personal property (movable property) located within the State, based on the property value rather than on a fixed amount or benefit. Properties are distinguished as secured and unsecured—property for which the value of the lien is not sufficient to assure payment of the tax.

0.5% VTA MeasureA

1.0% City of MH

6.5% State

CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET

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