An issue common to all CARPD member agencies in the State is the need for stable funding. For most (if not all) districts, the primary source of revenue comes from local property taxes and assessments. The California State Constitution requires the proceeds of the property tax be allocated among the local agencies in the county where the revenue is collected. Recipients of property tax revenue include cities, counties, special districts, K‑12 schools, and community colleges. The county auditor is then responsible for allocating property tax revenue to these entities according to state law.

In the 1980s, how those revenues were allocated began to change and those changes continue to affect local government agencies to this day. In 1988, Proposition 98 established a minimum funding requirement for schools and community colleges commonly known as the minimum guarantee. The guarantee encompasses state General Fund and local property tax revenue. A set of formulas in the State Constitution determines the guarantee each year.

Four years later, the Legislature found itself in a deficit position and unable to sufficiently fund education at the level guaranteed under Prop. 98. As a result, California lawmakers permanently redirected a significant portion of the property tax revenue from cities, counties, and special districts to schools and community colleges. The redirected revenue is deposited into a countywide account known as the Educational Revenue Augmentation Fund (ERAF). Revenue from ERAF is allocated to schools and community colleges to offset the funding these entities otherwise would receive from the state General Fund.

Thirty years later, property tax revenues that otherwise would be directed to CARPD members continue to be deposited in County ERAF accounts. CARPD is currently researching the impacts of ERAF on its membership. If you would like to participate in the study, please contact Executive Director, Matthew Duarte at mduarte@capri-jpa.org.