State Challenges OC Supervisors in Superior Court Over Property Taxes

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County officials Tuesday afternoon will head to Orange County Superior Court to square off against California’s Department of Finance and the chancellor of the state’s community colleges, who filed suit last year against Orange County, arguing that the county’s tax grab of $73 million in property taxes was illegal.

When the county financed its billion-dollar bankruptcy in 1995, state officials allowed them to send a portion of their vehicle license fees directly to bond holders. But in 2007 when the county refinanced its debt, the legislative authorization for the special license fees was lost.

Despite warnings that the authorization should be quickly reestablished, county legislative leaders did not act. The intercept, as its known, was not addressed in any subsequent county legislative platform or by the county’s lobbyist, Platinum Advisors.

In 2011, Gov. Jerry Brown’s budget staff discovered the omission and took back the money, prompting an intense reaction from county leaders. Assemblyman Jose Solorio sponsored last-minute legislation, but it failed to make it through both houses of the Legislature.

In the wake of unsuccessful legislative efforts, county leaders reacted to Brown’s move by simply taking the money themselves. After hiring several law firms, they persuaded then-Auditor-Controller David Sundstrom to ignore Sacramento’s budget allocations on property taxes.

On Jan. 31 before Sundstrom resigned to take a similar position in Sonoma County, he allocated a whopping $73 million to the county instead of to local schools.

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