Major Revenue Assumptions / 534
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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 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
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
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.
Property Tax
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.
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.
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
$11
FY 10-11
FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20
Sales Tax Revenue
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
$11
FY 10-11
FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20
Property Tax Revenue
44%
SchoolK-12
12%
County
11%
RPTTF
10%
City of
Morgan
Hill
7%
Comm.
College
6%
Special
District
6%
VLF-
County
3.92%
VLF-
Other
Cities
.08%
VLF-Morgan Hill
MorganHill Property Tax 1% Distribution
6.5%
State
1.0%
City of
MH
0.5%
VTA
MeasureA
0.5%
1976
Transit
0.125%
VTA
MeasureB
0.125%
County
MeasureA
Allocation of Sales Tax Rate
(Current Sales Tax Rate 8.75%)