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Special District White Paper — Draft for Internal Review annually by all general governments at $10 per $1000 real market value (RMV), Local option levies are permitted and are inside the constitutional limit, as are levies for certain Gap bonds allowed by the Constitution. Levies for repayment of voter - approved general obligation bonds are outside the constitutional limit. In considering the formation of a special district, one important practical concern for the City of Eugene and other taxing jurisdictions is whether the district's new property tax operating levies and special levies will possibly result in property tax revenue compression. New tax levies by a special district cannot be allowed to push total general government taxes close to or beyond the $10 per $1000 RMV limit; tax compression and Toss of revenue to all general government taxing jurisdictions are then likely to occur. If the constitutional limit is reached and tax compression occurs, all local option levies are reduced first. Once local option levies are zeroed out, additional reduction in the tax collected is then applied proportionally to permanent operating tax levies until the limit is reached. Compression is calculated on an individual property basis, rather than district wide. A second constitutional provision, Article XI, Section 11, requires that properties be taxed based on their individual ass ssed their 1996 rea arketvalue decreased by 10% and then increased by 3% a year thrice 1997) o \,their real\mar et value, whichever is lower. The relationship between aI iia, rket value and assessedt;val a is dynamic and changes from year to year. Within the cit boundaries of Eu erre, assees d v lue- in-FY01 is about 70% of real market value. Therefo e tie RMV imit applied to Eugene's equivalentlto a cap of approximately $14.30 per $1000 tax ble as�sesd value (AV). Geiier I overnment taxing jurisdictions currently uses only pa o= this maximum Iirrlit is r�opn for additional permanent property tax levies by special d stricts. Available General Government Tax Rate Capacity within Eugene It is important to understand how much of the constitutionally permitted total general government tax rate is currently in use and how much of the permitted rate remains available for use by a special district. At the time of the preparation of this paper, FY01 assessed values and tax rates were available for analysis. Within Eugene in FY01, the total voter - approved permanent maximum property tax rates for the City of Eugene and Lane County amounts to about $8.30 per $1000 taxable AV In addition, there are an urban renewal tax levy and two local option levies within Eugene; these amount to about $0.50 per $1000 AV. Together, the current general government tax rate totals about $8.80 per $1000 AV in FY01. Of the $14.30 per $1000 AV total general government property tax rate permitted by the Constitution to be levied on a property within Eugene in FY01, abou $R 80 per $1000 A is bein us nd about $5.50 per $1000 AV is available for a special district without triggering revenue compression. This represents about $41.5 million potential gross maximum annual revenue capacity that is constitutionally permitted but is now unused by general governments based on FY01 property values. Keep in mind that the voters must approve any use by a special district of this permitted revenue capacity. Applying the practical limitation of the 93% property tax collection rate to this potential revenue capacity would result in a net maximum potential of $38.6 million. With voter approval, a special district serving territory within Eugene's boundaries could utilize some of this unused constitutionally permitted potential general government rate capacity for a Draft #5 Page 13 10/24/01