OC Studies Options for Suing State Over Property Taxes

The Hall of Finance in the county's Civic Center in Santa Ana is where residents pay their property taxes. But Orange County gets only about seven cents back for every dollar sent to Sacramento. Photo by: Norberto Santana, Jr.

Friday, June 18, 2010 | Tired of getting the lowest bang for their buck on property taxes — now hovering at seven cents on the dollar — Orange County supervisors are asking whether that kind of unevenness stretches the state’s constitution.

During this week’s fiscal year 2010-11 budget deliberations, they asked county counsel Nick Crissos to hit the books and answer a question: Does Orange County have a constitutional right to be fairly taxed?

“We’ve got to get creative on this,” County Supervisor Bill Campbell said this week after successfully convincing his colleagues to investigate legal options.

After decades of failed legislative attempts in Sacramento to the change the state’s property tax system — set up by Proposition 13 — Campbell thinks Orange County has to look at the problem in a deeper way.

Citing successful constitutional challenges about the equity of school funding, Campbell wants to know whether “because of this funding formula … there are constitutional rights being violated for citizens of Orange County.”

If county officials aren’t able to bring suit, he’s even contemplating working with a residents group or labor, he said, to file suit against the state.

Yet the move to sue Sacramento could also be seen as a vote of no-confidence in Orange County’s state legislative delegation, which is largely dominated by Republicans.

Ironically, it’s an all-Republican county Board of Supervisors that is telling the public they don’t see any of their legislative leaders in Sacramento successfully addressing the No. 1 fiscal issue facing Orange County: property taxes.

To date, the biggest success in bringing back more property tax dollars came from Santa Ana’s Sen. Lou Correa, a Democrat who was largely able to trade a budget vote for a slight change in the formula.

Law enforcement and hospitals already are fighting it out for a piece of the $50 million “Correa Dollars” in the 2010-11 budget process.

Yet even the Correa dollars put Orange County up to only 7.5 cents on the dollar in terms of return on property taxes.

Campbell, who served in the state Assembly from 1996 to 2002, said the county does indeed owe Correa applause for the accomplishment.

But party affiliation has nothing to do with success in Sacramento when it comes to changing the way property taxes are sliced up for counties across the state, Campbell said.

It’s actually the ghost of Howard Jarvis and Proposition 13 that haunts Orange County.

Back in 1978, when the law capping property taxes was adopted, Orange County was largely a rural community with low property values. When the formulas were set for how property taxes would be returned to counties, Orange County was left behind, virtually at the bottom in the state.

And no one in Sacramento wants to change that.

“The battle is real simple,” Campbell said. “Are other counties willing to give up revenue for those at the bottom of the curve to have more?”

Campbell notes that any changes to the formula face the steep challenge of cutting into revenue for other counties and school districts.

“We always seem to be outnumbered, and it never changes,” he said.

The biggest question that Campbell wonders about today is this: “Should we have sued 30 years ago?”

Please contact Norberto Santana, Jr., directly at nsantana@voiceofoc.org.

 

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