Another news article on the impact of California's Prop. 13 on state finances

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http://www.sfgate.com/cgi-bin/articl...MNV7155VSC.DTL

In the 31 years since Prop. 13 was enacted, property tax revenue has increased every year - until now.

A forecast from consulting firm Beacon Economics predicts that property tax revenue in the state will fall 6.1 percent in the next fiscal year, which runs from July 1 to June 30, 2010. The following year will see a 3.6 percent decline, followed by a more modest 0.8 percent drop, it predicts. Only in 2012-13 will property tax revenues rise again and then only by 1 percent, Beacon projects.

A drop in property tax revenue wallops the state, because it is obligated to make up any significant loss to the schools. The Legislative Analyst's Office projects the state will have to pony up almost $1.5 billion to K-14 schools over the next three years to compensate for declining property taxes. Gov. Arnold Schwarzenegger has already said the state will have to make up $430 million this year for school funding because property taxes have lagged projections.

"Property tax is the bread and butter of our discretionary revenues - it's how counties provide libraries, sheriff's patrols, maintain the jails, district attorneys, prosecution, all the countywide services are funded through the property tax," said Paul McIntosh, executive director of the California State Association of Counties, the advocacy group for the state's 58 counties. "When you see a decline in that, without a decline in demand for those services, it will have a tremendous impact."

Who gets property taxes?

Each county and town has its own formula for allocating property taxes. Here is how the basic 1% tax is divvied up in Contra Costa County. On top of the 1%, many areas have voter-approved additional assessments for bonds and special districts.
-- Schools (K-12 and community colleges) - 48%
-- Special districts - 19%
-- County - 13%
-- Redevelopment agencies - 12%
-- Cities - 8%
Source: Contra Costa County