Library Levy
Compression
- What is it?
- What does it do?
- Why does it matter?
What it is:
The effect of Measure 5 and 50 on property taxes. If the Measure 5 limit is lower than the Measure 50 limit, compression occurs.
What it does:
Causes an individual property tax bill to be lower than what the local governments levied.
Why it matters:
The Library Levy (and other local option levies) are the first tax not collected if compression occurs.
Property Taxing Capacity and Compression
There are two property tax limitations:
Measure 50 limits the tax rate that is applied to the assessed value of a property. Tax relief comes from limiting the growth of assessed value to 3% per year.
Measure 5 limits total taxes on a property to $10 per thousand of real market value.
Whichever limit produces the lowest tax results in the tax bill on each property. If the Measure 5 limit is lower than the Measure 50 limit, “compression’ results. This causes a tax bill to be lower than the local governments levied. Compression reduces the taxes in this order:
- 1st - any local option levies are reduced. If this does not bring the taxes below the Measure 5 limit, then
- 2nd - permanent tax rate levies are reduced. If this still does not bring the taxes below the Measure 5 limit, then
- 3rd - taxes to pay debt that is not General Obligation Bond debt are reduced.
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