Tuesday, July 27, 2010

TAX SHOCK FROM PPH! A 32% Tax Rate Hike!

Palomar Pomerado Health is moving forward with a 32% tax rate hike, to $23.50 per 100K of assessed value (AV) from $17.75 per $100K of AV, to cover payments on the Proposition BB bonds approved in 2004.

The PPH Finance Committee passed, without opposition, a resolution recommending the tax rate hike. The recommendation must be approved by the full PPH Board to take effect. The next PPH Board meeting is scheduled for August 9th.

In "calculating" the target tax rate ($17.75), PPH skewed its tax revenue models by excluding years of low AV growth (for example, FY1992/93 to FY1996/97), and by including only years of high AV growth (FY1997/98 to FY2003/04). PPH is now claiming the moderate AV growth since Prop BB passed was "unforeseeable."

Further, PPH has had knowledge of AV revenue issues for several years. As an example, last year: Prop BB Tax Rate Increase Coming Next Year?! (October 03, 2009)

This slide was presented to PPH Board members at a PPH meeting in 2008 warning them of AV revenue issues!

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