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

Source: California State Auditor, Report 2015-106, March 2016

HIGHLIGHTS

Our audit of the effects on local governments’ property tax revenue related to expansions of selected California State University (CSU) and University of California (UC) campuses highlighted the following:

  • The properties that the campuses acquired had minimal impact on their local governments’ property tax revenue because of the state constitutional limit on property tax rates and state laws that dictate how the taxes are allocated.
  • Two of the five CSU campuses we reviewed acquired 10 properties with values totaling nearly $28 million.
  • The three UC campuses we reviewed acquired seven properties with values of $45.8 million.
  • Eleven of these acquisitions were already tax-exempt, and thus the purchase had no impact on property tax revenue.
  • One of the acquisitions had a relatively low value and was resold in just over a month. For the other five purchases, the estimated loss of property tax revenue to the respective local governments was less than 1 percent.
  • Although there is a lack of formal policies requiring that CSU and UC campuses engage in discussions with local governments regarding financial concerns, several campuses have reached agreements with local governments as necessary for fire and emergency services.
  • Although some local governments expressed concerns about increased costs posed by campuses’ demands for services, five were not concerned about increases in the demand for services.

Related:

University of California Audit
Source: California State Auditor, Report 2010‑105, July 2011

From the summary:
Although the University maintains extensive financial records, it should provide additional information to improve public understanding of its operations.

Our review of the University of California’s (university) public funds, student fees, and auxiliary enterprises, revealed the following:

– Public revenues and expenses gradually increased from fiscal years 2005-06 through 2009-10….

– The Office of the President currently tracks about $1 billion annually in a Miscellaneous Services accounting code.

– The Los Angeles campus, the Office of the President, and the Regents of the University of California designated the use of $23 million in revenue for unauthorized purposes.

…To address the variations in per-student funding of its campuses, the university should complete its reexamination of the base budget to the campuses and implement appropriate changes to its budget process.