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Debate Flares Over Property Tax Caps Tied to Bond Measures

California and the West | CALIFORNIA ELECTIONS / PROPOSITION
39

Foes charge that tax increases could exceed the limits that supporters have touted in radio and television ads.

September 27, 2000|JULIE TAMAKI | TIMES STAFF WRITER

SACRAMENTO — The latest skirmish involving Proposition 39, the fall initiative to make it easier to pass local school bonds, is over how much it could raise property taxes if approved by voters.

Supporters of the measure say new legislation linked to the proposition caps the amount that property taxes can be raised by a school bond. Opponents took issue with that Tuesday, saying the legislation, signed into law this month by Gov. Gray Davis, eliminates the caps.

Proposition 39 would lower the proportion of the vote needed to pass school bond measures from two-thirds to 55%. The bond money would be used to build and remodel schools and community colleges and would be repaid through property tax increases.

The bill Davis signed, AB 2659 by Assemblyman Ted Lempert (D-San Carlos), was meant to clarify a previous Lempert measure relating to Proposition 39 by stating that bonds issued under the initiative would be general obligation bonds. It also includes some wording changes.

The combined changes, according to Gerald Beavers, director of business, labor and capital outlay for the independent legislative analyst's office, remove the firm caps on property tax increases that were contained in the first Lempert measure, AB 1908.

Beavers said the first measure's caps would have made it difficult to sell bonds at a good rate. At issue now is whether the changes will lead to larger property tax increases than have been touted by supporters of Proposition 39 in radio and television ads.

Lempert's latest legislation takes effect only if voters approve Proposition 39. It contains a cap on property tax increases in a single election of $25 to $60 per $100,000 of assessed property value.

Opponents of Proposition 39 say that because general obligation bonds carry a guarantee of repayment, property tax increases could rise above the caps if property values failed to keep up with projections.

"California voters are being sold a pig in a poke," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.

Proposition 39 supporters angrily deny those assertions, saying the Lempert legislation allows a school district to issue a bond only after certifying that it will not exceed the cap.

"The claim that somehow there are no caps is false," said Cathy Christian, an attorney representing the Yes on Proposition 39 campaign.

She said that only in the rare event of a calamity such as an earthquake that destroyed homes could the caps be removed.

Bill Hauck, president of the California Business Roundtable, said he and other supporters of Proposition 39 expect school districts to abide by the caps even in the event of a calamity.

"We expect districts to adhere to those limits," Hauck said. "They wouldn't be true to voters if they didn't do it."

Whether Proposition 39 triggers property tax increases beyond the caps described in the Lempert measure will depend on how the measure is implemented, Beavers said.

What is clear, according to Beavers, is that the intent of AB 2659 is for districts to adhere to the caps.

"I don't see it as opening the door wide open, but giving some leeway," he said. "But who knows how it's going to be implemented?"

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