Quirk-Silva Offers Solution to OC-State Property Tax Dispute

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Assemblywoman Sharon Quirk-Silva, D-Fullerton, proposed a “bipartisan solution” in Sacramento today to resolve a dispute between Orange County and state officials involving $150 million in property tax revenue.

Quirk-Silva’s amendment to an existing bill would allow the county to pay back the revenue by 2019, thereby avoiding severe budget cuts that could have included layoffs. The county has been holding back the revenue during the past two years in response to a tax grab by Gov. Jerry Brown.

“The entire Orange County Delegation of legislators has already pledged their support and I am confident that the rest of my colleagues will follow suit,” declared Quirk-Silva in a news release.

Board of Supervisors Chairman Shawn Nelson, a Republican who also is from Fullerton, stated in a news release that Quirk-Silva will seek state Senate approval of the plan this week and Assembly concurrence next week.

The origin of the dispute dates back to last decade, when county officials left unprotected a stream of vehicle license fee revenue that flowed from the state to the county and then failed to deal with it for five years.

In 2004, the state stopped giving counties a share of the state’s vehicle license fees. Instead, it increased each county’s share of property tax funds, saying that was a more equitable and less volatile source of revenue.

Orange County, however, continued to receive its vehicle fees under special state legislation passed to cope with the county’s 1994 bankruptcy. When Orange County supervisors refinanced the bankruptcy debt package in 2005, they inadvertently terminated their special access to vehicle license fees. They and their lobbyists never attempted to fix the problem despite news reports alerting them to the issue.

During the state budget crisis of 2011, Brown’s staff discovered the glitch and took $48 million of this money to help balance the state budget. The county responded by redirecting $73 million in property taxes from local schools and community colleges to the county government.

For the better part of two years, county officials tried to resolve the dispute, which resulted a lawsuit, but could not.

General terms of the agreement on resolving the issue were reported Aug. 30 by Voice of OC.

According to a copy of the amended bill posted by the Legislature online, besides restoring money to Orange County government, the bill would require that the state Finance Department and community college executives confer with the county to reach a “complete resolution” of legal issues and that “all parties agree not to seek appellate review.”

Under the bill, “an appropriate resolution would be for the County of Orange to repay specified amounts over a specified period.” The amount listed in the bill is $150 million spread over six years.

“This bill gets Orange County back into the [vehicle license fee] formula, like all other counties in California, and will provide us with a more secure revenue source,” Nelson wrote. “It is also important that this revenue source has the potential for future growth as property values increase.”

To move quickly before the Legislature adjourns this year, Quirk-Silva amended a bill by Assembly Speaker John A. Pérez, D-Los Angeles, that is pending on the Senate floor and deals with the board of directors of the California Infrastructure and Economic Development Banks. Quirk-Silva took deleted the existing language and inserted the plan to help Orange County. All Orange County legislators co-authored the bill.

Please contact Tracy Wood directly at twood@voiceofoc.org and follow her on Twitter: twitter.com/tracyVOC.

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