Jun 19 2013
Supreme Court Confirms Piedmont School Board Made Right Decision on Flat Tax
Borikas decision upheld –
I’ve just learned that last week the California Supreme Court denied Alameda Unified’s petition for review of the Borikas decision. This means that the Piedmont District’s cautious decision to revamp our School Support Tax (Measure A) into a flat tax was the right decision.
I hope the Legislature will now revise the applicable statute, so it will become possible to replace the Measure A flat tax with something tailored to reflect lot size and land use. But in the meantime, Piedmont’s voters’ support for our schools is on solid legal footing.
Copies of court papers are on Alameda Unified’s website www.alameda.k12.ca.us/cms/page_view?d=x&piid=&vpid=1371035339710.
Jon Elliott
Editors’ Note: The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.
Previously Alameda Unified had taxed large commercial property at a per square foot rate and residential (and small commercial) property at a flat rate. The Borikas decision found the law requires taxing different classifications of property at the same rate. The Piedmont flat rate tax option to comply with “same rate” is unfortunately the most regressive tax possible.
Given the sharply regressive nature of a flat rate tax, I believe a meaningful senior exemption is good and compassionate public policy. The Piedmont School Board told George Childs an income based senior exemption was likely illegal. This income based exemption is in use by four other local districts and is based on the Federally defined very low income level of 50% of regional median income or starting at about $32,000 in Alameda County; Contra Costa Counties. Piedmont included an SSI based senior exemption with the ultra low SSI income requirement of under $9,000.
If I understand their rules correctly, the bill introduced by Alameda Assemblyman Ron Bonta to address Borikas (AB 59) died in June. But I hope there’s at least some chance he and/or our own Assembly Member Nancy Skinner will have some interest. I’m trying to find time to follow up.
I would love to be part of a public process to analyze these questions and draft a fairer measure. Rick Schiller’s views are one starting point, but there are a lot of variables to sort through to design one that really fits our community values. The Legislature needs to re-create more flexible authority for local districts.
Mr. Schiller continues to argue that the law allows a different tax per parcel so long as the “rate” is the same. There is no support for this interpretation in Borikas or the statute.
The statute says: 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.” There is no use of the word “rate.”
The key phrase is “special taxes that apply uniformly to all taxpayers or all real property.” Clearly, charging the same tax to every parcel owner ‘applies uniformly.” Mr. Schiller suggests that applying the same “rate” to every parcel owner also would ‘apply uniformly.” But the statute does not refer to “a special tax rate that applies uniformly,” it refers to “special taxes that apply uniformly.”
In Borikas at page 25, the Court states: “The District contends this cannot be the case because it assertedly results in manifest unfairness—i.e., that all parcels must bear the same tax, regardless of size and character. The Legislature was aware, however, that uniform parcel taxes were considered ―more inequitable than ad valorem property taxes because all parcels, regardless of size, are subject to the same tax.”
I understand that Mr. Schiller is eager to see a “per square foot” tax. We may learn through the lawsuit against West Contra County for a “per square foot” tax whether the Appeals Court (and eventually the Supreme Court) will approve such a tax despite the statutory language and legislative history noted above. But the current state of the law strongly suggests a “per square foot” tax is not legal.
I am eager to see a less regressive tax. My comments before the Board suggested a per square foot tax based on both lot size and house size. Per square foot of lot size alone creates too wide a base. The 2,000 sq ft resident lot would pay 1/40 of the 80,000 sq. ft. lot. A balance is needed and a move away from the sharply regressive flat tax enacted.
I am also eager to see a tax with compassion for seniors. The Board publicly informed George Childs than an income based senior exemption is not legally valid. Oakland, Berkeley, Orinda and Moraga have a senior exemption that requires ages 65 and income at or below 50% of the county median.
School tax proponents argued the Piedmont tax provides a compassionate senior exemption by using the SSI qualification. Exactly two individuals in Piedmont have qualified for the School Tax exemption and information is not available as to whether these exemptions are based on age 65 and income below $9,000.
I am as curious as Mr. Raushenbush to learn the outcome of the West Contra Costa County case; should it allow per square foot, will the Board reconsider and include a meaningful senior exemption?