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Little Hoover Commission report on Special Districts: "The government closest to the people is often times a special district."

Little Hoover Commission report on Special Districts: "The government closest to the people is often times a special district."

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Published by Sabrina Brennan
Read cover letter carefully.
Read Executive Summary.
See chapter "Property Tax Allocations to Enterprise Districts".

At the bottom of the second page of the cover letter (p ii):

The essential lesson of the last decade is that successful enterprises –
public or private – are those that understand the needs of their
customers and continuously strive to improve the services they offer.
Similarly, successful organizations evolve to capture efficiencies and to
align their core competencies with customer needs. Bigger is not always
better, and sometimes smaller is.

But most special districts were formed when California looked different
than it does today. Nothing ensures that these districts evolve to
whatever size, shape and governance structure makes the most sense –
given contemporary technologies, economics and social considerations.
Local Agency Formation Commissions (LAFCOs) were created to be the
venue for these discussions and catalysts for change. If strengthened,
LAFCOs hold the best promise for individual communities to shape their
government.

At the top of p iv:
"The government closest to the people is often times a special district."
Read cover letter carefully.
Read Executive Summary.
See chapter "Property Tax Allocations to Enterprise Districts".

At the bottom of the second page of the cover letter (p ii):

The essential lesson of the last decade is that successful enterprises –
public or private – are those that understand the needs of their
customers and continuously strive to improve the services they offer.
Similarly, successful organizations evolve to capture efficiencies and to
align their core competencies with customer needs. Bigger is not always
better, and sometimes smaller is.

But most special districts were formed when California looked different
than it does today. Nothing ensures that these districts evolve to
whatever size, shape and governance structure makes the most sense –
given contemporary technologies, economics and social considerations.
Local Agency Formation Commissions (LAFCOs) were created to be the
venue for these discussions and catalysts for change. If strengthened,
LAFCOs hold the best promise for individual communities to shape their
government.

At the top of p iv:
"The government closest to the people is often times a special district."

More info:

Published by: Sabrina Brennan on Feb 03, 2011
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11/14/2011

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Finding 5: Property tax allocations to some enterprise districts create inequities
among districts and distort the true costs of services. A significant portion of the
property tax allocated to all enterprise districts subsidizes districts with the
highest reserves.

Enterprise special districts that levied property taxes on their customers
before Proposition 13 was enacted in 1978 continue to receive a portion
of the property tax revenues that are now allocated by the State. The
policy of sharing property tax revenue with some enterprise districts
made sense immediately after Proposition 13 – which cut tax rates and
severed the link between specific taxpayers and specific government
agencies. With property tax revenue pooled at the State, there was some
logic to divide it among agencies that historically received it. That policy,
however, makes less sense with each passing day.

In 1996-97, enterprise special districts received $421 million in property
tax revenue. A sizable portion of that revenue – more than $100 million
– went to 15 enterprise districts that also had some of the largest
reserves.

One consequence of this policy is the inequity among districts offering
similar services. To some degree, all taxpayers are effectively subsidizing
the services received by the customers of districts receiving property tax
revenue. The policy also raises questions about the allocation of scarce
resources among all agencies providing local services. Property tax
revenue that goes to enterprise districts is not going to public safety,
parks and recreation, libraries and
other “non-enterprise” community
services that cannot recover their
costs through fees. Many of those
districts struggle to provide services
with declining resources.

The State should reconsider the
allocation of property taxes to
enterprise districts generally, and
should specifically examine those
districts that receive property taxes
and have large and growing
reserves.

10.7%

18.3%

53.1%

1.2%

8.8%

7.9%

0%

10%

20%

30%

40%

50%

60%

Cities

Counties

Schools

Less than
countywide

Special
districts

Redevelop-
ment

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