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Financing
of the El Cajon Redevelopment Agency
The Agency does not have the constitutional authority
to levy taxes, fees, or assessments on property
in the El Cajon Redevelopment Project Area. Instead,
the Agency funds its redevelopment efforts through
the receipt of “tax increment”. In short,
tax increment is the difference between the property
tax revenue generated now and the property tax revenue
generated in the future. This difference, or increment,
is allocated to the agency to fund redevelopment
projects.
Property taxes are set by Proposition 13, not the
Agency. Proposition 13 established a statewide formula
wherein property taxes will equal 1% of the property’s
assessed value. The assessed value is set by the
San Diego County Assessor when property is sold
or new construction is completed. Proposition 13
also states that if property is not improved or
sold, its assessed value can only increase by up
to 2% a year.
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When
the El Cajon Redevelopment Project Area was adopted,
the then current assessed value of all property
within the Project Area was calculated. The total
figure is called the base year value. As property
is improved or resold, the assessed value increases
in accordance with the limitations established by
Proposition 13. The property tax revenue generated
by the increase in value (above the base year value)
is called tax increment. (The tax increment is what
is distributed to the Agency.)
For example, Mrs. Smith owns property valued at
$100,000 this year, and her taxes paid at a rate
of 1% would be $1,000. Mrs. Smith sells her property
to Mr. Jones at a price of $500,000. The taxes paid
by Mr. Jones at the same 1% rate would be $5,000.
The difference between $1,000 and $5,000, or $4,000,
is called tax increment. This revenue is distributed
to the Agency for reinvestment in the Project Area.
Demographic Information
PROJECT AREA TOTAL ACREAGE 1,547.60 (17.2% of the
City)
| Residential: |
374.91
(24.2%) |
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| Commercial: |
368.39
(23.8%) |
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| Industrial: |
498.69
(32.3%) |
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| Institutional: |
117.80
(7.6%) |
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| Streets,
Right-of-way: |
187.81
(12.1%) |
Click
here for map
Agency budget for FY 2001-02: $9,149,140
Proposed budget for FY 2002-03: $9,287,606
These figures represent gross tax increment
revenue, therefore include the 20%
set-aside for low and moderate income housing and
all pass-through obligations.
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