What Is Mello Roos?

Mello Roos is a special tax that is used to finance public infrastructure projects in California. In California, it is also known as Community Facilities Districts (CFDs). Mello Roos taxes are generally applied to new development projects in areas where there is a need to build additional infrastructure, such as roads, schools, hospitals, and parks. The taxes are used to pay for the construction and maintenance of public facilities, as well as the borrowing of money to finance such projects.

How Mello Roos Works

Mello Roos taxes are assessed on a per-parcel basis. The taxes are calculated based on the home’s assessed value and the district tax rate. The assessed value of a property is based on the land use and zoning categorization. The district tax rate is set by the local government and can vary from one district to the next.

Once the taxes are assessed, the homeowner is required to pay them annually. In some cases, the taxes may be collected on a quarterly basis, but generally, they are assessed and collected yearly. The payments are typically due at the beginning of each year and are prorated for the remainder of the year if the home is sold after the taxes are assessed.

Examples of Mello Roos in California

One example of a place in California where Mello Roos taxes are being used is the City of Chula Vista. In Chula Vista, the local government has levied a Mello Roos tax to help finance the development of a new soccer stadium. In this case, the tax will be used to help fund the construction of the stadium, as well as the maintenance of the soccer fields, lighting, and other public infrastructure.

Another example of Mello Roos taxes being used in California is in the City of Roseville. The Mello Roos taxes levied here are being used to fund the construction of two new high schools. The taxes will also be used to help fund the development of new libraries and recreation centers, as well as the maintenance of parks in the community.

Conclusion

Mello Roos is an important source of public financing in California, and it is being used to finance a wide variety of projects around the state. Understanding Mello Roos is critical for any college student studying business and finance, as it is an important tool that local governments use to fund public infrastructure projects.