CA appeals court overturns “soak businesses” parcel tax

Richard Rider, Chairman, San Diego Tax Fighters Richard Rider, Chairman, San Diego Tax Fighters 0 Comments


I hate being a Cassandra, always reporting bad news.  Well, I’m SUPPOSED to hate being a Cassandra.  I’m a little weird about it, actually.

But no matter.  Today I have a bit of GOOD news for California taxpayers. In a significant 3-0 ruling by a California appeals court, a wrongly structured Alameda school district parcel tax was struck down, and the money collected has to be refunded to taxpayers.

The state law concerning parcel taxes is clear.  The parcel tax has to be a uniform dollar amount, regardless of the value of the property.  I suppose the theory is that such a tax benefits each taxpayer equally, so the tax has to reflect that.  Exceptions are made for seniors and the disabled, but NOT for commercial property.

The tax grabbers know full well that ‘soak-the-rich” measures resonate with voters.  And, after all, there are more voters than business owners. So some agencies and jurisdictions have been trying to pass parcel taxes that allow commercial taxes to be taxed on some sliding scale — bigger payments for bigger parcels.  Such was the case with this tax.

“No can do” says the court.  You have to follow the law.  What a novel concept!

Assuming this ruling stands (and it seems to offer little “wiggle room” for the CA Supreme Court to rule otherwise), this decision should squash such “innovative” parcel tax measures, and overturn any that have already been passed.

Lawyers around the state, take note.  Find those wrongfully-passed taxes, and overturn them in court. Make ’em give back the wrongfully-confiscated funds.

Now, back to my Cassandra role.  If I were a betting man (and I am), assuming that this ruling stands, I’d expect the Democrats in Sacramento to move to change the state constitution on this matter.  While the wrongly-structured parcel taxes would still have to be repealed, that would free up the districts to pass new ones.

Couple this will the Democrats’ push for lowering the voter approval rate from 2/3 to 55%, and we could see a flood of new parcel taxes.  And I suspect that, unlike school bonds, there is no limit on how big such parcel taxes can be.  Uh oh.

Such a change would have to go to the voters for approval.  I’d guess they’d have a good chance of success in our “true blue” state.

Soak the rich!  Stick it to businesses!

I’m back in my Cassandra mode.   Didn’t take long to revert to form. I’m strangely at peace.


Alameda school tax thrown out by court
Bob Egelko
Updated 7:40 p.m., Saturday, December 8, 2012

A state appeals court has thrown out most of a 2008 parcel tax to fund schools in the city of Alameda because it set higher rates for larger business properties – a ruling that, according to the winning lawyer, could invalidate other school taxes around the state.

A California law allowing school districts to propose property tax increases to local voters required them to set uniform rates for each parcel, exempting only those owned by seniors and the disabled, the First District Court of Appeal in San Francisco said Thursday.

That standard was violated, the court said, by Measure H, approved by more than two-thirds of Alameda Unified School District voters in June 2008. It taxed residential and small commercial parcels at $120 a year but set higher rates, of 15 cents per square foot up to a maximum of $9,500 a year, for commercial parcels larger than 2,000 square feet.

The court said the maximum tax for all properties should have been $120 per parcel. It upheld the measure’s exemption for property owners 65 or older and those receiving Supplemental Security Income because of disability.

. . . to read the full article,click on the URL above.


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