7-a - Report on the Orange County Tax Equity Study

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CCM Economics, LLC Orange County Tax Equity Page 27 animal taxes, and the beer and wine tax. Other than the motor vehicle tax, these taxes constitute a small amount of revenue for the county. In 2015, the motor vehicle tax collected $9.3 million. Taxes such as these tend to correlate very strongly with property taxes. Other taxes, such as the animal tax, only apply to people who license a new dog or cat, and correlate with population. Other permits and fees include the privilege license that applies to different professions and businesses such as pawn brokers, loan agencies, and check cashers. This license fees only collected $15,000 in 2015. Other permits include the franchise fee which collected a little over $300,000 in 2015. The final category worth mentioning is Orange County fees for services. This includes a wide range of activities including emergency management, deed registration, and the sheriff’s office. Many of these fees are straightforward and can be easily assigned to the different geographic subunits. For example, deed registration is flat fee that doesn’t change based upon the location of the property, but on the number of pages in the deed. Similarly, marriage licenses are a constant cost for every citizen regardless of where the live. Other charges for service are related to quantity of the service provided. In 2015, the sheriff’s office received $2.311 million for services—however, these monies are mostly derived from payments from the federal government to offset the cost of housing federal inmates, and therefore should not be counted.16 A detailed inspection of the budgets and annual comprehensive financial documents for the four different municipalities was also undertaken. A similar methodology to that used for Orange County was used to assign per capita revenue and expenditures for each citizen in the 16 In essence, the citizens of Orange County have paid federal income taxes to the federal government. The federal government has now taken some of these tax dollars and paid them back to the Orange County government to offset the cost to the local citizen of housing federal inmates. This has the effect of canceling the cost to all citizens and shifting it to the citizens who pay federal income taxes. Therefore, this ‘cost’ has already been counted once —in the portion of taxes paid to the federal government. If it was to be counted again, it would be double counting and give an inaccurate picture of how much citizens are actually paying for government services. 64