Property Tax

Assessors Continue to Report Growth in Taxable Value of Property

property tax increase

County assessors this month continued to report growth in the value of taxable property in their areas, which will translate to more property tax revenue for schools and local government.

The Los Angeles County roll grew 3.7 percent, Assessor Jeffrey Prang reported July 15, marking the 11th consecutive year of growth in taxable values in the massive county. The 2021 roll grew $62.9 billion over the prior year to reach $1.76 trillion in total net value.

Changes in property ownership triggered reassessments that added $44.9 billion to the Los Angeles County roll, while the Proposition 13 inflation factor added $16.4 billion, and new construction added $8.8 billion in value.

As of July 15, assessors in 14 counties had made their 2021 assessment rolls publicly accessible, and all noted increases from last year.

Growth is lower than in some previous years, primarily because the inflation factor – the maximum increase in value for a property that has not changed owners or undergone new construction – is 1 percent for 2021. In most years, the inflation factor has been 2 percent, the maximum allowed under the state constitution. Local governments are set to experience significant revenue growth even while individual property owners benefit from the lower-than-usual inflation increase in their property tax bills.

Based on publicly available data, here is the assessment roll growth in each county that has reported its numbers:

  • Contra Costa, 3.44 percent.
  • Kern, 0.87 percent.
  • Los Angeles, 3.7 percent.
  • Marin, 3.95 percent.
  • Orange, 3.47 percent.
  • Placer, 5.88 percent.
  • Sacramento, 5.19 percent.
  • San Diego, 3.72 percent.
  • San Mateo, 4.16 percent.
  • Santa Clara, 4.6 percent.
  • Sonoma, 3 percent.
  • Stanislaus, 4.8 percent.
  • Ventura, 3.6 percent.
  • Yolo, 4.45 percent.

Prang said there was a $5.5 billion reduction in the value of business personal property, which includes machinery, equipment, boats, and aircraft. The reduction reflects the impact of the pandemic on the local economy, Prang said. His office proactively reduced approximately 73,000 personal property assessments in areas hit hardest by the pandemic, he indicated.

Additionally, reduced commercial air travel resulted in reduced aircraft assessments, and the decline in commuting resulted in reduced assessed values for fixtures at refineries, Prang reported.

“Although the 2021 assessment roll reflects growth, which is good news, other factors are now indicating the exact nature of the economic slow-down caused by the COVID-19 pandemic,” Prang said. “The mixed implications of this past year will be felt for some time to come. Just as an example, the housing market experienced robust growth during the pandemic while small businesses were hit hard along with hotels, refineries, and airlines.”

In most counties, the growth has been occurring year after year, so the total value of taxable property is much higher now than just a few years ago. For example, San Mateo County’s growth of 4.16 percent is on top of last year’s 7.02 percent growth, 7.12 percent growth in 2019, 8 percent growth in 2018, and similarly strong growth in prior years.

Ventura County Assessor Dan Goodwin noted that his county’s assessment roll – which this year hit a record $152 billion – has grown for 10 consecutive years.

Kern County’s relatively low growth of 0.87 percent reflects the declining values of oil properties. Reporting on the county’s $900 million assessed value growth (to reach $103.5 billion), Assessor Jon Lifquist said, “Major declines in oil and gas assessments were offset by a surprisingly strong real estate market.” There was a 24 percent decrease in the value of oil and gas properties, while real estate values increased 5 percent and now account for 76 percent of the total roll.

San Diego County Assessor Ernest Dronenburg, president of the California Assessors’ Association, said the 3.72 percent growth in his county “highlights that Proposition 13 delivered on its key promises.”

“First, that taxpayers be protected from unaffordable property taxes due to skyrocketing real estate values that could cause them to lose their homes,” Dronenburg said. “Second, it provided for the ninth year in a row a reliable and increased government funding source for key services like schools and first responders, insulating them from the current COVID-19 pandemic. Thanks to Proposition 13, no homeowner should lose their home due to unaffordable property taxes and no government should lack funding due to the pandemic.”

Although July 1 marked the official deadline for assessors to complete their rolls, the State Board of Equalization has granted time extensions to many counties – a routine part of the process – and there typically is a delay in the public release of the information in many counties.

Under Proposition 13, property tax revenue for schools and local government increases nearly every year, even as individual property owners are protected from unexpected and unmanageable annual increases in the tax bills. Property taxes are predictable for owners and local government because the tax is based on a property’s acquisition value – increased to account for any new construction and adjusted annually for inflation up to 2 percent – rather than the unpredictable market value.