Areas that avoided fires feeling the burn
Local agencies, like school boards, cities and fire districts got a bit of a nasty shock in December when they received a letter from the Sonoma County Auditor-Controller-Treasurer-Tax Collector Erick Roeser. In it, the county announces the triggering of the Calamity Reassessment Process, a state tax law that is triggered when more than $10,000 worth of real property damage from a state declared disaster.
This process was triggered, in part, because the county tax rolls had already been issued for the year when the fires struck.
Each tax year, Roeser’s office must dole out the property tax shares to the various agencies using what is called “countywide apportionment factors.” These are determined yearly by the county auditor and say, essentially, which agencies get how much money. “When we get the certified (property) values from the assessor, typically in September, we do a process called ‘extending the tax roll’ and generate bills for every property owner, but we also determine how the tax being levied is going to be distributed to all districts.”
Those factors, essentially the percentage each agency receives from the rolls, cannot be changed after they’ve been issued. However, the huge amount of damage in the county means that the overall amount of money available will be significantly less. However, the percentages of that pot of money allocated will not change. What this means is most local agencies will be losing money.
“We received the reassessment from the assessor and created revised bills and in the process of doing that, we were able to see how much assessable taxed value being reduced,” Roeser said. “At the time of the Dec. 6 letter, from the assessors estimate, we were expecting the tax roll would be down by $1.6 billion or 2 percent and that resulted in a Prop 13 reduction of (approximately) $16.1 million. We load that into the allocation factors and then determine how much is each agency’s share going to go down. The allocations remain the same, but the overall the pot went down.”
Roeser added how ever, that estimates done after that December letter seem to indicate that losses will be five percent higher than originally estimated.
In the Healdsburg area, its schools that are taking the brunt of the cuts. Unlike Local Control Funding Formula, or state-funded districts, Healdsburg area schools as so-called Basic Aid districts. This means all of their funding is dependent on property tax revenues, and they are not guaranteed backfill by the state.
Geyserville Unified School District will lose approximately $46,100 this year and $4,200 next year.
“We have concerns with the decrease in property tax revenue, but we are hopeful that our conservative budgeting will allow for no decrease to staffing and programs for the 2018/2019 school year,” said Geyserville Superintendent Deborah Bertolucci.
West Side will experience a $22,500 loss and Alexander Valley will lose $28,200. But Healdsburg Unified is taking the largest hit, with a 17-18 loss of $377,200 and an 18-19 loss of $64,700. HUSD is facing cuts (as reported in another article in the Tribune), and Superintendent Chris Vanden Heuvel can only hope the state will come through for them.
“We are hopeful that the governor will include backfill (for us), but what they saw in Lake County and other places is that the backfill didn’t come until a year or two later so we have to pretend its not there,” he said. “(If) we get that money recouped at some point that’ll be great. Senator McGuire’s been great lobbying on our behalf to get that, so we’re hopeful. But, it’s different. There’s only a handful of us in Sonoma County, and we lost by far the biggest amount.”
While the loss came as a nasty shock, he’s hopeful that the real estate market will help the district bounce back. “Obviously, everyone is anxiously watching how the fires are going to affect housing prices and that’s going to have a direct affect on our revenues. It’s kind of up in the air at this point how it’s going to affect the district — the biggest effect was the proportional share we had to incur in December. We were waiting for the Sonoma County property tax assessment and it came in with a letter that said you are losing $400,000 right off the top and we had no idea it was coming, so that was not a good surprise.”
The city of Healdsburg is slated to lose $59,300.
Going forward, Roeser seems some relief and remedies on the horizon.
“The next chapter of the story is that we are working with the state and the state has agreed to backfill lost property tax for non-school districts and that was included in the state proposed budget in January,” he said. “However, school districts are treated differently and the state will handle any backfill differently and more in line with how they handle normal funding for schools.”
Some agencies will also lose funds for next year, but the amounts will be much lower. That’s because the losses assessed last year were for only 25 percent of the year (since the fires happened in October), while for the coming two years, those losses will be assessed for the entire year, and the new tax rolls will include new allocation factors.
But even though the state has committed to help, it’s still a very fluid situation, according to Roeser. “I think its important for taxing agencies to know that these reductions that we’re estimating, we do have a two-year commitment to backfill, but we know rebuilding will take longer than that. We’ve heard (rebuilding will take) two to five years, but once we get beyond the next two years where the state is providing backfill there will probably be an impact to taxing agencies that won’t be neutral or backfilled by the state,” he said. “So, there could be an additional impact at that time for those taxing agencies. It’s hard to know how the increase in property values is going to offset that loss, because we know that the market is red hot, which will result in annual increase in revenues on some level. Still they should cognizant (that the) backfill commitment is only two years.”
