OPINION: School Board Premature in Measure A
Measure A opponent asks: Was our School Board too hasty in changing Measure A to a flat tax?
On December 11, 2012, the Board was advised by legal counsel to change Measure A to a uniform flat tax rate that applies to every parcel. His advice followed the ‘Borikas Decision’ wherein an appeals court reversed an earlier judgment that had ruled in favor of the Alameda School District’s 2008 tax measure that had variable tax rates based on use and size of parcel. The Appeals Court concluded that the governing statute (Sec 50079-50079.5) while allowing certain exemptions does not otherwise permit these variances, although this has been an accepted practice for years. A final ruling and its ramifications may not be known for months or even years.
The term ‘flat tax’ is nowhere mentioned in the Court’s 37-page Borikas decision, or in the governing statute. California Property Tax Information (www.califoniataxdata.com) also says special taxes for schools may be applied on the basis of benefit, cost of providing service, or any other “reasonable” basis.
George Borikas, sole proprietor of Ritz Real Estate Services in Alameda, filed suit seeking to have the special tax authorized in 2008 by the Alameda School District’s Measure H declared invalid, which would remove the lien on properties he owned. Measure H was clearly flawed because it had one rate for small commercial and industrial parcels but a radically different rate for larger parcels in the same classification. It did not treat all owners the same. Piedmont’s existing school Measure B that will expire on June 30, 2014 is similarly flawed. It has five different rates based on size of lot for residential properties and two different rates for commercial properties.
Alameda remedied its flawed 2008 measure by passing a replacement measure in 2011, two years ago, which so far has not been contested. This measure exempted parcels owned by seniors 65 and older, assessed non-exempt parcels with buildings at a uniform rate of $0.32 per building square foot, and assessed non-exempt parcels without buildings at a flat rate of $299 — three classifications each with differing rates. This is a progressive tax thought to be legal and valid by the Alameda School District.
Had our School Board been so advised, it might have opted for a replacement tax similar to Alameda’s 2011 measure. Instead, we are asked to support our schools by voting for an overly simplistic flat tax of $2,406 on every parcel in the city, a regressive tax that increases taxes on smaller properties while reducing the tax on larger properties.
The adoption of a regressive flat tax by the Piedmont School Board did not alleviate this concern. In my opinion, a rational, progressive tax based on building size would have been more palatable to many of us. If the Court rules otherwise, there would be time to adjust.
William Blackwell, Piedmont Resident
Editors’ Note: The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association (PCA). PCA does not support or oppose ballot measures or candidates for public office. Legal opinions are those of the author.
Excellent piece but requires some slight modifications.
Despite my respect for Bill’s opinion, I do not agree with his conclusions:
Whatever “Californiataxdata.com” may say, the legality of parcel taxes is determined by statute and Court decisions interpreting the statute. We agree that Borikas would find Piedmont’s current Measure B illegal; I think it would also find a “per square foot” tax illegal also (see below). What is clear is that a “per square foot” tax almost certainly would result in a lawsuit against Piedmont–just as the attorney who represented Borikas has sued West Contra Costa school district for its “per square foot” tax according to newspaper reports. Piedmont prudently is avoiding spending its limited funds on legal fees to defend such a tax (the equivalent to 2 teachers? 3-4 teachers?). The time to avoid such lawsuits is NOW–if the law is clarified as Bill wishes, then the Board and community can consider a tax that is not “flat”; to do the reverse invites a lawsuit.
As for the validity of a “per square foot” tax:
School Districts are authorized to ask voters to approve parcel taxes under Government Code Section 50079. It provides: “As used in this section, ‘qualified special taxes’ means special taxes that apply uniformly to all taxpayers or all real property within the district, except that ‘qualified special taxes’ may include taxes that provide for an exemption from those taxes for taxpayers 65 years of age or older or for persons receiving Supplemental Security Income for a disability, regardless of age.”
In Borikas, the Court reviewed the legislative history and noted: “Thus, it is apparent the Legislature and school districts understood districts otherwise had no authority to classify taxpayers and property and impose differential tax rates.” “It is also clear the Legislature was aware uniform parcel taxes were considered “more inequitable” than ad valorem property taxes because all parcels, regardless of size, are subject to the same tax.”
The Court concluded that the statute and legislative history “compel the conclusion section 50079 does not authorize school districts to impose special taxes that classify and differentially tax property within the district.”
Draw your own conclusions based on the statute and how the Court interpreted it.