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County Hasn't Lost Its Property Tax Case Yet

March 16, 2003

Re "County Ignoring a Likely Disaster," March 9:

Robert A. Pool won a preliminary bout in Superior Court and believes the county should fold. Here are reasons it shouldn't:

Judge John M. Watson ruled that the "recapture method" used by the state's counties is unconstitutional.

He may be wrong. Numerous other judges around the state, reviewing the same or similar facts, came to the opposite conclusion.

Watson's rulings have a high turnover rate. This trend may continue.

Watson's certifying a class-action lawsuit means that Pool will want 20% of the potential refunds. Pool's a nice guy, but not $80-million nice.

Watson's decision applies to Orange County. Fifty-seven other counties need a higher-court decision to ensure uniformity.

The refunds will not come totally out of the county's coffers. Cities and school districts will be making nearly 94% of the refunds.

Who benefits? Pool. Commercial landowners. And, at best, one-third of home-occupiers. That's not pro-taxpayer.

Capitulating now would be "foolhardy and fiscally irresponsible." The taxpayers deserve a final resolution. An appeal provides it.

John M.W. Moorlach

Orange County

Treasurer-Tax Collector

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There is nothing "likely" about Pool's case. The final ruling has yet to be made, and because of its applicability to the state's other 57 counties, it needs to make its way through the appeals process.

Pool also noted that he was "deeply troubled" by my revising an estimate of the potential effects of the case. Assessment of property taxes is an extremely complex process involving scores of factors applied over 400,000 potential payments. We revised our "gross order of magnitude" estimate when other factors became known to us and will continue to revise it as clarity comes to the case.

Due to a high degree of uncertainty, we would be best served by following the carpenter's axiom "Measure twice, and cut once." I have briefed individual taxing authorities as to any potential impacts.

It is incumbent upon them to weigh their own fiscal situation in relationship to the case and to make the fiscal adjustments they deem necessary. The county's share amounts to less than 10% of the total, and we can cover that from reserves, if necessary.

We are monitoring this case closely and are doing our part to expedite its resolution. We stand ready to make timely refunds (including interest) once the issue has been decided and the courts give us the appropriate direction.

David E. Sundstrom

Orange County

Auditor-Controller

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