What is the “Tax Gap or Local Option Tax?
Most taxing districts are allowed to ask for temporary taxing authority above the permanent rate limitation. (This type of authority is not available to education service districts.) This authority is known as “local option taxes.” Local option taxes are limited to five years for operations and 10 years for capital construction purposes. A “double majority” of the voters is required to approve a local option tax. The ‘gap’ is the difference between what a property is paying in taxes and the total amount the property could be paying in a category (education, government) at the Measure 5 maximum.
