Once again, a legislative proposal threatens to tax different types of parcels at different rates.
The de facto split-roll parcel tax comes from SB 1021 by state Sen. Lois Wolk, D-Davis.
SB 1021 would allow 1,043 school districts to levy unlimited tax increases on select property owners through non-uniform parcel taxes. This would essentially overturn current law, as well as a court ruling, that say parcel taxes must apply uniformly.
The bill would provide numerous ways to vary tax rates.
For example, school districts could split parcel tax assessments within a district based on characteristics such as the size of the parcel, the size of improvements to the parcel or the use of a parcel.
This means different tax rates could apply to residential parcels than shopping malls, industrial parks, hotels and wineries.
The bill also would allow school districts to impose a different tax rate on unimproved parcels and to treat multiple parcels as one — for purposes of a parcel tax — where the parcels are contiguous, under common ownership and constitute one economic unit. They would need to have “the same primary purpose” and not be separate and distinct properties that may be independently developed and sold.
As the law stands, school parcel taxes must “apply uniformly to all taxpayers or all real property within a district.” Wolk’s bill would undermine this law, as well as recent court decisions.
In the case of George J. Borikas v. Alameda Unified School District, taxpayers successfully overturned a parcel tax that had been levied at a non-uniform rate. That tax, approved by voters in June 2008, imposed on residential parcels a $120 yearly tax, while large commercial and industrial parcels were hit with 15 cents per square foot, with a maximum of $9,500 per year.
The First District Court of Appeal agreed that this violated the law, and the California Supreme Court later declined to review the case, upholding the appellate ruling.
Last year, however, Assemblyman Rob Bonta, D-Alameda, introduced AB 59, seeking to nullify Borikas before it was finalized by retroactively allowing de-facto split-roll parcel taxes.
The California Apartment Association joined a coalition led by CalTax to oppose the bill, which was defeated in the Assembly Revenue and Taxation Committee.
SB 1021 poses a similar threat and is expected to be heard in the Senate Governance and Finance Committee, which is chaired by Wolk, on April 9.
The California Apartment Association again will be working with CalTax to oppose the bill.