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L.A. County supervisors grill assessor over change in tax estimate

The officials seem incredulous at the sharply lower new figure for growth in the tax base. The assessor blames the change on a decline in the housing market.

April 10, 2012|By Jason Song, Los Angeles Times
  • Los Angeles County Assessor John Noguez appears before county supervisors Tuesday.
Los Angeles County Assessor John Noguez appears before county supervisors… (Brian van der Brug, Los Angeles…)

Los Angeles County supervisors sharply questioned Assessor John Noguez on Tuesday over his fluctuating tax estimates, saying they found his forecasts implausible and ordering an audit of his department.

In December, Noguez estimated that the county's property tax base would grow by $18.7 billion for the next fiscal year. But last week he revised his estimate to only $5.1 billion, which could lead to the county receiving almost $50 million less than expected in revenues next year.

"It just doesn't compute," said Supervisor Zev Yaroslavsky. "I don't mean this as an insult ... but it appears you had no clue throughout the year."

Supervisors said they had never seen such a steep estimated drop in such a short time. Noguez and another person from his office said the December estimate was based on information covering the first nine months of 2011, when the area's housing market was relatively steady. But the market went into decline the last three months of the year, leading to the new forecast, they said.

Supervisors seemed incredulous, saying they were not aware of such a sudden decline in the housing market and questioning the assessor's calculations.

In December, Noguez estimated that home values would decrease by $2.6 billion overall. By April, that number had grown to $13.5 billion.

Yaroslavsky said that if the housing market had really tanked so quickly, it "would have been common knowledge" and been written about in the media.

"We're reading those stories now," Noguez said.

Assessor's officials later pointed to several recent news reports, including a Times article from Feb. 26, about slumping home prices.

Separately, the district attorney's Public Integrity Unit is investigating Noguez's relationship to Ramin Salari, a tax agent and Noguez campaign fundraiser who has gotten large property tax reductions for wealthy homeowners he represents. Noguez, who was elected in 2010, has said he is a friend of Ramin but denies doing anything to favor him.

Prosecutors are also looking at Noguez's relationship with a former employee who admitted to secretly and improperly reducing values for 125 Westside property owners. Last month, Noguez said he had asked the former employee to "check the status" of those values but did not order them reduced.

Supervisor Michael D. Antonovich made an apparent reference to Salari during the meeting.

"How many of these reductions are by someone who hires a lobbyist to represent them for a reduction?" he asked.

"None," said George Renkei, an assistant assessor.

Supervisors seemed especially upset that they did not hear about the revised tax estimate until last week. They are scheduled to begin considering the county's budget next week, and county administrators have been using Noguez's December estimate in their planning.

"For that to just transpire overnight is mind-boggling to me, absolutely mind-boggling," said Supervisor Don Knabe.

William T Fujioka, the county's chief executive, said he doubted that Noguez's latest estimate was correct and urged that the audit be done quickly. But even if the county receives less property tax revenue than expected, Fujioka said there should not be drastic cuts.

"I'm confident we'll be able to address this without any significant reductions in county services," he said.

The county has nearly $300 million in reserve.

Antonovich also asked if assessor's officials were notifying cities and other agencies that receive property taxes about the updated estimate.

Officials expect to tell others by "Thursday or so," Noguez said.

Antonovich suggested that the officials call school districts to speed up the process.

"This is going to be a severe tsunami to the schools and cities," Antonovich said.

Officials at several school districts and agencies contacted by The Times said they could not comment on the situation until they have more details.

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