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Up to 25,000 Quake Victims Paid Excessive Property Tax : Rebuilding: L.A. County has yet to reassess up to 2,000 buildings damaged in the Northridge temblor.

April 05, 1995|SHARON BERNSTEIN | TIMES STAFF WRITER

The owners of as many as 25,000 earthquake-damaged buildings in Los Angeles County paid too much in property taxes last December, the result of a lag in post-earthquake real estate reassessments.

Some homeowners were levied penalties for failing to pay the overbilled amount. While County Assessor Kenneth P. Hahn said most problems have now been resolved, his office has yet to reassess about 2,000 structures, mostly condominiums and shopping centers.

Facing a Monday deadline, owners of those structures are being billed based on the value of property 15 months ago.

"We're sorry," Assistant Assessor Gary Townsend said. "We wish we could have done a better job on it. But considering the circumstances, I think we did an adequate job."

Overall, property values dropped by $5.5 billion as a result of the quake, officials said, causing a drop in property tax revenues of about $55 million.

The reason for the assessment delays, said Hahn, was money. He said his department, charged with reassessing 67,000 structures and parcels, had been so severely cut that he was forced to bring in retirees to help handle the work.

Even so, the county had just 31 appraisers and 15 clerks working on the project, according to figures provided by the assessor's office.

"If we could have thrown more money at it and had more staff available for it, we certainly could have gotten it done sooner," Hahn said. "I think we've done a pretty remarkable job due to the limited resources."

The process took so long that the county has been forced to either refund overpayments or adjust the current April bills downward.

"We had some people who called with righteous indignation that the government required them to pay," said Assistant Treasurer and Tax Collector David J. Collins. "There were people who were very bitter about it. I explained that there's nothing we can really do."

Some homeowners, such as Zvia Uziel of Northridge, discovered that they had been slapped with penalties for failing to pay taxes they thought had been deferred. Others, such as Howard and Lee Blatt of Tarzana, obtained deferments of taxes due last year--only to find themselves faced with two years' worth of bills, both due at the same time.

"We're not objecting to paying our taxes," said Lee Blatt, who said the couple owes $18,000 for the two years on their home, a small business and two apartment buildings. "We're just saying that the burden was too much for this April, especially since not all the properties are fixed yet."

About 5,000 people, including the Blatts, applied for and received deferments of their April, 1994, tax bills.

By last November, the county had reassessed about 25,000 properties and sent out refunds or corrected bills. But about another 25,000 owners who had applied to have their property reassessed were asked to pay based on the pre-quake worth of structures and land because the county had not completed the work, according to Townsend.

Owners who didn't pay were assessed penalties based on the old values. Then, when their homes were reassessed, the penalties were adjusted.

By January, 35,000 properties had been reassessed. By last week, according to Townsend, work on all but 2,000 properties was completed.

William Frias, who owns 100 apartment units in the Hollywood area, said he received a refund of $2,900.

"Waiting is not really important when you have income property," Frias said. "As long as you get your money."

Not all of the $55 million in lost taxes will be absorbed by the county, which keeps only 23% of property tax revenues. The rest is doled out to schools, municipalities--including the city of Los Angeles--and special assessment districts. But the county is responsible for refunds.

Typically, the reduction in taxable value of property is based on the cost of repairs. Property owners submit copies of documents from their insurance companies or bills from contractors.

It's too late to apply for a reduction in value for this year, but property owners whose damage is still not repaired can apply to the assessor's office for a reduction next year.

County officials said the delays and snags were inevitable in such a massive, costly program. So far, according to Townsend, the county has spent $3.4 million examining about 65,000 structures and parcels of land.

By comparison, the riots of 1992 damaged 694 properties, whose value went down $104 million. The firestorms of 1993 affected 493 properties, reducing their taxable value by $101.4 million.

When the earthquake hit, Townsend said, the county was down about 100 appraisers from a peak in the late 1980s of around 700, and many of them were busy working on appeals from 100,000 people who wanted their property values lowered because of the economy.

Also, he said, some reassessments took longer because property owners had not settled with their insurance companies. Others found new damage after they had applied for a reduction.

The county, already cash-strapped and facing challenges in raising funds, expects to recoup much of the lost tax revenues from federal and state agencies, officials said.

But County Administrator Sally Reed said that will not happen for several months, leaving the county short as much as $30 million in the interim.

"It does create an additional cash-flow problem in a situation where we already have cash problems," Reed said.

Ranking Disasters

Comparing devastation from the Northridge earthquake, the 1993 firestorms and the 1992 riots. Figures for Los Angeles county:

Dollars, in Millions

Quake Reduction in property values: 5,500 Reduction in property tax revenues: 55

Fires Reduction in property values: 101.4 Reduction in property tax revenues: 1.01

Riots Reduction in property values: 104 Reduction in property tax revenues: 1.04

Source: Los Angeles County Office of Assessor

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