Property Tax revenue has increased from $24.6 million in FY 2022-23 to a projected $29.6 million in FY 2026-27, representing a total growth of approximately $5.0 million, or an average annual growth of 4.7 percent, over the five-year period shown in the chart. Property Tax forms the foundation of the City’s long-term financial stability and is driven by assessed valuation growth, ownership transfers, new construction, and development activity. The primary driver of assessed valuation growth beyond the annual statutory increase is the completion of several major residential and commercial projects currently in the development pipeline. Key developments include the continued expansion of Tustin Legacy, which is expected to generate additional assessed valuation as new projects are completed. However, because Tustin Legacy is located within a former redevelopment project area, the City receives approximately one-third of the property tax revenue it would typically receive under the basic tax levy. As a result, growth in assessed valuation within Tustin Legacy does not translate into a proportional increase in property tax revenue to the City. To help bridge the property tax gap and offset a portion of the cost of essential City services, property owners within the Tustin Legacy Community Facilities Districts also pay a Special Tax “B” for services. Additional assessed valuation growth is expected from infill residential projects in areas outside of Legacy, including The Jessup and Stafford Glen, which have converted former office properties into higher-value residential neighborhoods. Unlike development within the former redevelopment area, these projects generally provide the City with its customary share of the property tax levy and therefore contribute more directly to ongoing General Fund revenue growth. By combining the natural appreciation of existing property with high-value development projects, the City is positioned to maintain a resilient and expanding revenue base. This diversified growth strategy supports the City’s ability to keep pace with rising service costs while maintaining the quality of life and infrastructure expected by Tustin residents.
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