December 5th, 2009 9:03 AM by Lehel S.
While the average tax cuts would be small – just $7 for a home assessed at $250,000 – the reductions likely will cut revenue for cities, counties and schools by hundreds of millions of dollars. The cuts would affect tax payments due in December 2010 and April 2011.
“There will be a slight decrease,” said Anita Gore, spokeswoman for the state Bureau of Equalization. “But it’s not an increase, and it’s the first time that’s happened.”
Under Prop. 13, property tax hikes for existing owners are based on the overall inflation rate, but capped at 2% a year. It’s been a rarity when the tax rise isn’t at 2%. State officials set that inflation rate at less than 2% just five times in the past 31 years.
“But it’s never been negative,” Gore said. Highlights of the state announcement include:
The state ruling is preliminary since it was derived from the federal government’s Consumer Price Index. The state will calculate its own inflation rate, called the California Consumer Price Index, then notify county assessors later this month.