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A welcome revenue boost for L.A. County

An increase in property values is expected to provide an additional $50 million in tax money.

May 29, 2013|By Jason Song, David Zahniser and Kate Mather, Los Angeles Times
  • L.A. County Supervisor Zev Yaroslavsky, shown in April, said of the tax revenue boost: "It just gives us a little relief. It's not a silver bullet."
L.A. County Supervisor Zev Yaroslavsky, shown in April, said of the tax… (Francine Orr / Los Angeles…)

Local government coffers are beginning to feel the effect of the region's slowly improving economy, led by the significant increase in property tax valuation in Los Angeles County.

The total value of taxable parcels in the county is expected to rise by about 4.25% in 2013, the largest jump since the depths of the recession in 2009, according to new figures released by the county assessor. That should deliver a $50-million boost in tax revenues to county government, officials said.

At L.A. City Hall, meanwhile, an increase in tax revenue has already spurred lawmakers to begin reversing some of the cuts that were imposed during the lengthy economic downturn.

The increased revenue is expected to be modest. But it has delivered some optimism that a larger recovery is on the way — and that governments can finally begin to at least think about undoing years of cuts and pay freezes.

Economists have been predicting revenue growth for local governments, and some believe it will continue.

The region is "emerging from the darkest part of the recession," said Ed Leamer, director of the UCLA Anderson Forecast. "You'll see quite a few years in a row of growth."

In Orange County, total taxable property values rose from $420 billion to $428 billion last year. Assessor Webster J. Guillory says his office is still compiling numbers for this year but said it will likely go up again.

Riverside County, which saw some of the deepest drops in house values in the nation amid the foreclosure crisis, is projected to see its first rise in values since 2008. Officials project total values will rise about 3.5% to $212billion or $213 billion.

"For the county and the cities that have struggled budget-wise, it's taking us in the right direction," Riverside County Assessor Larry Ward said. "I think just mentally, things are getting better.... We've had a pretty tough five or six years."

The boost in L.A. County's property tax collections is being fueled largely by increased sales and rising home prices, said Chief Deputy Assessor Santos H. Kreimann. Housing values were up by nearly 23% in March compared with the same time the year before.

The total valuation of property in the county is expected to top $1.1 trillion, up from $1.08 trillion in 2012.

It will be months before the L.A. County Board of Supervisors will make any decisions about how to spend the extra $50 million, which represents a tiny fraction of the county's $24.7-billion budget. But some supervisors are already preaching caution.

"There's a lot more than $50 million we're going to have to address," said Supervisor Zev Yaroslavsky. "It just gives us a little relief. It's not a silver bullet."

One possible beneficiary could be the L.A. County Sheriff's Department. Sheriff Lee Baca has embarked on a series of reforms amid an FBI investigation into allegations that jailers abused inmates. It is unclear, however, how the reforms would be paid for.

Supervisor Michael D. Antonovich's office said his priorities include restoring funding to the Sheriff's Department and "restoring other services cut to balance the budget due to unfunded mandates," such as the new federal healthcare law, a spokesman said.

Unlike many municipalities, including Los Angeles, the county was never forced to implement layoffs, furloughs or major program cuts over the last year. The county even saw its Standard & Poor's credit rating raised last fall.

But county agencies have had to dip into reserves and cut services, and most of their 101,000 employees have not had a raise since 2009. Several departments, including the Sheriff's Department, have also been requesting additional funding.

"Whenever the revenues increase, we're hopeful," said sheriff's spokesman Steve Whitmore.

Union members who have been demonstrating outside the County Hall of Administration for pay raises say the extra revenue should be used to restore services.

"Bargaining isn't just about employee pay and benefits; it's about rebuilding Los Angeles County and fully funding the services that so many members of our community rely on," said Jerry Clyde Jr., a children's social worker and member of the Service Employees International Union 721, which represents about 55,000 county employees.

In addition, L.A. County security guards are pushing for $3 million in additional training.

L.A. City Hall was particularly hard hit by the recession. As tax collections increase, elected officials have been trying to strike a balance between rebuilding services that were cut and socking away money for the next emergency.

Last week, the City Council approved a budget that includes 65 more firefighters, 533 new police vehicles and the trimming of an additional 35,000 trees. But council members also placed more than $60 million into a "budget stabilization fund," which will be used as a cushion in future years. That comes on top of a reserve fund that now exceeds $260million.

"It was critical that we deal with the surplus revenue in a responsible and balanced way," said Matt Szabo, deputy chief of staff to Mayor Antonio Villaraigosa, whose office submitted the budget plan to the council. "There is no point in adding back services if those services would have to be cut the first time revenues come in below projections."

Some anti-tax activists are urging restraint.

Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Assn., said he hopes local governments proceed with caution and do not rush to grant employees raises or needlessly expand programs.

"The typical response is to spend when times are good, but hopefully they've learned some lessons," he said. "We'll see."

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