Big Questions About a Little Known Tax

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Workers at the County Assessor’s office say the county has allowed as much as $125 million in uncollected taxes to slip through it’s fingers because of a secret tax break offered to large businesses who use government leases.

“I’m very worried,” said County Supervisor Bill Campbell after listening to a presentation made by Orange County Employees Association General Manager Nick Berardino at this week’s supervisors’ meeting.

Berardino came to the supervisor’s meeting at the urging of assessor employees who say County Assessor Webster Guillory has been shorting the public on uncollected taxes.

Guillory said he will check out the claims, but indicated that the accusations are political season posturing.

“It’s a very big number,” Cambpell said, shortly before supervisors ordered CEO Tom Mauk to start reviewing the allegations.

At issue is a little known levy called possessory interest tax, which is generated when a private company leases a government building or land. The tax is similar to the property tax bills that homeowners across the county will get next month.

Yet employees at the assessor’s office said Guillory has for years resisted collecting this tax when properties change hands mid-year. The reason, the employees allege, is that Guillory wants to stay in the good graces of large corporations that use government land.

On large parcels, the uncollected amounts are huge, the employees argue.

“This is just the tip of the iceberg,” Berardino said while saying that employees – who fear retaliation – said that uncollected taxes total as much as $125 million largely owed by big corporations such as cable companies.

“I hear I’ve been accused of some interesting things,” Guillory said when I talked to him about the workers’ concerns. He added that the accusations seemed motivated by the political season. Guillory is running for re-election and is facing one challenger in the June Primary.

“I am not aware that we are missing PIs (possessory interest taxes),” Guillory said.

County supervisors also wondered aloud at the meeting how something so huge could have been missed, especially at hearings such as assessment appeals.

Actually, the issue has been raised before.

At a 2006 hearing of the assessment appeals board – which meets at the old county courthouse – one assessor employee admitted the oversight.

“Over the past 23 years, it’s just something we haven’t done,” said former employee Ron Cooper during an appeal involving Cox Communications, which had received a pass on a supplemental tax and was contesting other tax amounts.

“It’s not just cable companies,” Cooper told the assessment board. “It’s all possessory interest taxes that have been missed,” Cooper said. “We’re trying to fix that.”

One assessment appeals hearing officer said the number was stunning. But no hearing board member – who are appointed by county supervisors – followed up.

CEO Mauk told supervisors that Berardino’s allegations were just charges. All board members asked Mauk to start reviewing the matter and come back with an update.



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