Describe the recent property tax issue faced by the city and how it impacts the city’s budget an

Dismantling of the Citys former Redevelopment Agency While grappling with the Citys bankruptcy, another significant financi

Describe the recent property tax issue faced by the city and how it impacts the city's budget and financial condition. (City of Stockton CAFR 2012)

Describe the recent property tax issue faced by the city and how it impacts the city's budget and financial condition.

Dismantling of the City's former Redevelopment Agency While grappling with the City's bankruptcy, another significant financial event was taking place during the year. The California Supreme Court ruled in favor of the State of California, upholding its action to terminate all community redevelopment agencies (RDA) in the State. The outcome of the ruling was unclear legislative language combined with aggressive enforcement action by the State Controller's Office and the Department of Finance to increase benefits from the legislation to the State in order to balance the State's budget. The full impact of the legislation is not yet known. After the State assesses its recovery efforts, further action by the State could be taken on local governments though we do not anticipate it impacting the City Due to the depressed property values continuing to exist in the State, bondholders will continue to face future risk of nonpayment as a result of declining property tax increment revenues. With Stockton and the Central Valley being the hardest hit of all areas within California in. property values, tax increment revenues dropped precipitously since 2007. As recently as September 2013, the City had to use its reserves to pay its Successor Agency bond payments which are considered a technical default on these payments.

 
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