B.1.4.3 Parcel Taxes

In California, local agencies including school and community college districts are authorized to impose parcel taxes approved by voters for specified purposes and within certain limitations under Government Code Section 50075 et seq. Parcel taxes are a fee that appears on a property owner’s property tax bill. A parcel tax is different from an ad valorem property tax, in that it is imposed on a per parcel basis, and is not based on the AV of the property. Parcel taxes are legally distinct from similar types of levies on property such as special assessments, which are based on a special benefit conferred on the parcel being assessed. There is generally no requirement that a parcel tax be based on any benefit received by either the property owner or the parcel being taxed.

Parcel taxes are special taxes and pursuant to Government Code Section 50077 require two-thirds voter approval. The passage of Proposition 39 in 2000, which lowered the voter approval requirement for local education bonds from a two-thirds vote to a 55% vote, does not apply to parcel taxes. Districts must declare the specific purposes of the tax in the ballot measure. A parcel tax can be approved for a set period of time (e.g., 10 years) or can be permanent. Statute requires districts to report annually to their school boards on the amount of funds collected and spent and provide the status of any project or purpose identified in the ballot measure.210

Parcel taxes apply to all property owners equally and are referred to as regressive because they typically require owners of smaller or lower valued property to pay the same amount as owners of larger or higher valued property.