California State Auditor Report Number : 2015-106

The University of California and the California State University
Several Campuses Recently Acquired Property, but Those Acquisitions Have Not Significantly Reduced Property Tax Revenue for Local Governments

March 3, 2016 2015-106

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning property tax revenue losses to the local governments as a result of expansions of the California State University (CSU) and the University of California (UC) campuses.

This report concludes that the properties the campuses acquired between January 1, 2010, and June 30, 2015, have had a minimal impact on their local governments’ property tax revenues. The minimal impact results largely from the state constitutional limit on property tax rates of generally 1 percent of the assessed value of the property. Further, because property tax from these properties is apportioned to multiple local governments within the counties, the impact of the lost property tax revenue to the local government that provides fire and emergency services to the campuses we reviewed is smaller than the total forgone property tax amount.

No formal policies require that CSU and UC campuses engage with local governments to discuss the local governments’ financial concerns when campuses acquire or construct property. However, most of the campuses we reviewed stated that they informally engage with local governments. Further, three of the 23 CSU and four of the 10 UC campuses have reached agreements with local governments related to the provision of fire and emergency services. These agreements are the result of, at least in part, the campuses’ specific circumstances. The city of Berkeley and Merced County, which provide fire and emergency services to UC Berkeley and UC Merced, respectively, have expressed concerns about increased costs posed by campus demand for services. However, neither local government provided recent information quantifying the increased costs. Finally, none of the local governments that provide fire and medical services to the campuses we reviewed have proposed specific tax measures since 2010 to fund fire and emergency services as a result of campus service demand.

Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor

Back to top