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INTEROFFICE MEMORANDUM: 8610-502 <br /> Fund Balance and Tax Base <br /> October. 21, 1986 077 <br /> • Page 2 <br /> • and still allow us to meet the objectives of the Board. <br /> Looking ahead to the 1987-88 budget, with fund balance <br /> available at such a low level and the urgent need to begin <br /> restoring it to a reasonable level, it is not anticipa <br /> that fund balance will be available, to balance next year's <br /> budget. <br /> Another factor that will have an impact on the 1987-88 <br /> budget is the effect of the actions ta - by the State <br /> Legislature on the County's tax base. All personal property <br /> used for personal purposes except autos, , .bile homes, boats <br /> and motors, and airplanes is now exempt from the property <br /> tax. This could result in the loss of $120-150 million in <br /> the base. Also, the lowering of the schedule of use value, <br /> for farmland is projected to result in the deferral of $300 <br /> • 400 million of farmland from the base. This amount compares <br /> • to approximately $150 million currently (see attached s <br /> article on the subject) . <br /> This erosion of the tax base is taking place at a time <br /> when the County is adjusting real property values to market. <br /> Normally, the tax base would increase as a result of the <br /> revaluation and make possible a much lower tax rate. <br /> However, the loss of tax base will affect what can be done as <br /> to the tax rate. We will continue to monitor and ' try to <br /> project the impact of the various changes,. It will not, <br /> however, be possible to set folthe the full list of options <br /> as to the 1987-88 rate until we have gone through the • <br /> upcoming year's budget process. <br /> Kenne h R. Thompson <br /> KRT/srs <br />