Democrats in the Legislature are poised to help make it easier for schoolhouse districts to pass packet taxes, but a court ruling this month – if it withstands an appeal – volition narrow  the scope of what parcel taxes tin tax.

Screen Shot 2012-12-19 at 11.23.08 PMThe Outset District Court of Appeals overturned Alameda Unified'due south parcel tax, passed in 2008 and lasting 3 years, that set dissimilar tax rates for owners of residential and commercial property. In Borikas vs Alameda Unified, the court said that it violated a state law that requires parcel taxes be uniform. The potential ramifications of the decision are significant every bit districts look to local property owners for ane of the few sources of money exterior of land revenue.

Over the past decade most a dozen school districts, mainly in the Bay Area, have adopted packet taxes similar to Alameda Unified's in an effort to ease the burden on the average homeowner while raising additional taxes from businesses and other types of properties. Just concluding month v districts in Los Angeles County, including Centinela Valley Marriage High Schoolhouse District, joined together to pass a parcel tax that charged two cents per foursquare pes for residential properties and vii.5 cents per foursquare foot for other classes of belongings. San Leandro Unified passed a mensurate taxing single-family, multi-family and business backdrop at different rates.

That model, which other districts have considered, is now in jeopardy. As for Alameda Unified, it may take to reimburse businesses several  meg dollars that Mensurate H raised illegally during the three years it was in effect. And a professor at the UC Hastings Higher of the Law who specializes in ceremonious cases said that taxpayers in other districts with similar taxes could sue to overturn their parcel taxes, as well.

That is, if the ruling stands. The five-member school board in Alameda, with one dissenter, voted last calendar week to entreatment the case to the California Supreme Court. Considering of the potential impact of the determination, "the chances are high that the court volition agree to hear the case," said David Levine, the Hastings law school professor.

The Legislature could as well arbitrate and amend the statute in question to permit the form of revenue enhancement that Alameda and other districts adopted. Democratic leaders, heady with a two-thirds supermajority, take already indicated that they would support a ramble amendment asking voters to lower the threshold to pass a parcel tax from 66.7 pct to 55 percent, the same as it is for school construction bonds. Dennis Meyers, assistant executive director for governmental relations with the California Schoolhouse Boards Clan, said this week that he has spoken with staff of Democratic Sen. Mark Leno of San Francisco, sponsor of the 55 percent bundle tax legislation (SCA 3), about the need to also reply to Borikas vs Alameda Unified. Irresolute a police would require only a bulk vote of the Legislature, while placing the 55 percent threshold on the country election in 2022 would require approval of two-thirds of the Legislature.

Stepchild of Proposition 13

About 10 per centum of the state'due south nearly one,000 school districts have passed parcel taxes. Because of Proposition thirteen, which banned new taxes based on a holding'due south value, most parcel taxes are flat dollar amounts. Most have been nether $100 per packet for a finite number of years – generally four to six – although a few have inflation indexes. In some wealthy communities, parcel taxes are hundreds of dollars ($589 in Palo Alto and $927 in Manufacturing plant Valley, with the passage of a supplemental tax last calendar month), and, in handful of districts more $1,000 ($1,169 in San Marino).

Some districts have passed variations of a flat fee, in an effort to try to make the parcel revenue enhancement less regressive without running upwardly against Proposition xiii's restrictions. A few have taxed backdrop by their size (but not assessed value). In fact, Alameda'south electric current parcel tax, passed last twelvemonth, does just that. It charges residential and commercial property owners 32 cents per foursquare foot of a building, with a maximum tax of $7,999 per parcel. Owners of backdrop with no buildings pay $299. Property owners end up paying unlike amounts, just considering the square-pes rate is the same, last year an Alameda County Superior Court estimate ruled that the bundle revenue enhancement was legal. The property owners who filed suit over Measure A didn't appeal.

The latest Appeals Court decision pertains to Measure H, the earlier package tax from 2008. Alameda Unified ran into trouble because it distinguished between commercial and residential backdrop. Measure H levied $120 per parcel for residential and small commercial backdrop, and 15 cents per square foot of commercial backdrop larger than 2,000 square feet, up to a cap of $nine,500 per year.

At issue was a 1986 statute adopted in conjunction with the passage of an initiative (Proposition 62) that was intended to clarify Suggestion thirteen. The statute said parcel taxes must "apply uniformly to all taxpayers or all real property within the" particular district.  Alameda Unified argued, and the district courtroom agreed, that parcel taxes had to exist the same for each class of taxpayers (single-family unit homes, flat complexes, vacant land, developed land) but could vary amongst types of property: commercial and residential in this example. They argued that districts need flexibility to answer to local situations and needs.

But the First Appellate Commune ruled that uniform means uniform, and the Legislature a quarter century ago intended a strict, not a loose definition "as a constraint on the extent of the taxing potency delegated to local governmental entities." Information technology voided all but the $120 per parcel charge for all property owners.

To the Supreme Court or the Legislature

Both Levine and a colleague at UC Hastings College of Law specializing in taxation, Professor Darien Shanske, hold that the 38-page decision by the three-approximate console was a well-researched, solid ruling. Only they too said the Supreme Courtroom could be persuaded past a credible argument, which they can envision, to reverse it.

Shanske said that in lieu of a Supreme Court ruling, the Legislature could utilize its own ready, past deleting the discussion "compatible" and a subsection of the police in dispute. This should let tiered bundle taxes. Legislators could also explicitly give districts the dominance to create any formula for parcel taxes that doesn't violate the land or federal constitutions.

Individuals normally accept up to 60 days to challenge the results of an election. But Levine said that in two cases California courts ruled that taxpayers could file adjust over taxes that were passed years before. As a result, school districts that passed packet taxes like Alameda Unified'due south may exist vulnerable to existence sued, fifty-fifty though the statute of limitations has passed.

Trustees in Piedmont Unified, a wealthy district adjoining Oakland, aren't taking any chances. The commune has a complicated multi-tiered tax based on packet size, distinguishing residential, commercial and undeveloped properties, single-family and multi-family unit residences, and raising  betwixt $1,900 and $iii,400, the highest packet tax in the state. Last week, they voted to chip that and enquire voters in March to pass a uniform (jaw-dropping) parcel taxation of $2,406.

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