Manteca registered the biggest gain in property values in San Joaquin County for the current year.
The $7.2 million gain is modest by pre-Great Recession standards. However, in today’s market it is a large amount compared with the rest of the cities in the county.
Lodi was the only other city with a gain in property value going up $229,000 based on mid-year data collected from ParcelQuest. The firm works with county assessors in all 58 counties to develop assessment of property values.
Stockton dropped $283 million for the current closed property assessment roll period while Tracy declined $72 million, and Lathrop $54 million.
San Joaquin County’s overall secured tax roll value stands at $49.726 billion. That’s nearly $4 billion less than at the historic peak in the 2008-09 tax roll period.
The mid-year report is the latest in a series of encouraging signs for Manteca’s economy and local government funding for basic services.
The $7.2 million jump in assessment in Manteca translates roughly into $720,000 in tax revenue for various local government agencies ranging from the county and city to the school district. The city typically receives an average of 18 cents of every dollar collected in property taxes. That would mean the jump could translate into a little under $140,000 for the Manteca general fund.
It also marks the end of a downward skid in property tax receipts stretching back to 2010.
Property tax in Manteca was expected to flat line for 2013 when the San Joaquin County Assessor’s Office provided information to the city back in late June.
The fact property tax could flat line translated into an improvement to the general fund bottom line of up to $400,000 in the 2012-13 fiscal year municipal budget.
Originally, the Assessor’s Office in April advised the city to brace for a 4 percent decline in Manteca property values. That is reflected in the $8,423,880 in projected property tax revenues in the budget adopted by the City Council. Revenue from property taxes in 2012 are expected to hit $8,852,000. The current budget assumed a decline to $8.4 million that - based on the mid-year data - is now likely to be exceeded. Instead the city should actually see an increase in property tax receipts when the fiscal year ends on June 30, 2013.
It would provide Manteca with a much needed cushion on the revenue side of the stressed general fund that pays for day-to-day government operations such as police, fire, parks, streets, and general government.
Should it materialize it would end a three-year decline in property tax revenue from a peak of $11 million in 2009. Property tax receipts this year slipped below 2006 levels.
The mid-year jump is being attributed to new construction - primarily homes being added to the tax rolls. Manteca has led the Northern San Joaquin Valley in new housing starts for the past 46 months averaging 300 a year. That’s more than the combined total of homes being built in all of the rest of San Joaquin County.
Sales tax receipts are budgeted to increase 4 percent to $8,698,870 in 2013. It is the third straight year of increasing sales tax for Manteca.
The leveling of property taxes and an uptick in sales tax is clearly an indication that the Manteca economy is improving. It may take years, though, for that upswing to translate into more robust government tax receipts.
Manteca has fared better than most other cities since the housing bubble burst. In terms of property tax, Manteca had major retail such as Bass Pro Shops, JC Penney, and Costco that was being finished just as the economy started slipping. Bass Pro with its ability to snare more than 97 percent of its sales tax revenue from non-Manteca consumers has been a major factor in Manteca being more resilient than its neighbors.
Property and sales taxes are the two biggest revenue sources for the city. In the proposed budget they account for a combined $17,122,600 in general fund revenue or just slightly more than the $17,108,790 the city expects to spend on public safety in the fiscal year that started July 1. Property and sales tax account for roughly 65.5 percent of all money the city collects for day-to-day government operations and public safety.
Contracts direct sales, property tax gains to first cover any cost rises for retirement
New contracts with the city’s bargaining groups direct increased revenue in property and sales taxes to go first to cover any additional retirement costs for city employees enrolled in the California Public Employees Retirement System (PERS).
Contract language calls for half any net annual increase after that of over one percent in combined property and sales taxes to be split among the employee bargaining groups to determine how they’d like it applied to compensation - salary or benefits - within their units.
Manteca is taking in roughly $17 million a year between property and sales tax. A one percent jump would represent about $170,000.
The contract language was aimed at stabilizing the general fund to eliminate the city’s structured deficit. At the same time it increased job stability for city workers by helping to partially insure the city can handle retirement cost increases as they occur. Pension payments are a major part of the municipal budget. Getting retirement and health costs under control is an essential key to keeping Manteca’s municipal budget on even keel.
The increase in city contributions to employee retirement costs that will start in 2013 could end up with minimal or no impact on Manteca’s municipal budget. Should revenue come in higher than projected it could possibly improve the chance of a compensation adjustment upward for municipal employees in 2013.
Municipal employees across the board have seen their overall compensation reduced by an average of 22 percent in the past four years. The police alone forgave $4 million over the course of their contract through 2015. Such employee concessions have allowed Manteca to start down the path toward eliminating the structured deficit or the act of spending more money in a year on day-to-day services than they take in during the year.