Bill OKd by Senate Could Bring Cities New Revenue

A bill passed Monday by the state Senate brought seven cities from the San Fernando Valley west into Ventura County a little closer to a new multimillion-dollar source of revenue.

The bill, sponsored by state Sen. William Campbell (R-Hacienda Heights), would give property-tax money to 44 Los Angeles and Ventura county communities that in the past had levied little or no property tax of their own. The bill passed on a 27-to-8 vote and was sent to the Assembly.

The money at stake is raised from the statewide property tax that has been in effect since Proposition 13 was approved by voters in 1978.

It is distributed under a formula that rewards cities that previously had high property taxes. Cities receive whatever percentage of the total property-tax revenue that they did before the state constitutional amendment.

Supporters of Campbell’s bill argue that the law discriminates against the very cities that levied little property tax or none at all. Inflation and the threat of losing federal aid make it imperative for some poorer communities with small tax bases to tap into the revenue source, they argue.

Cities Have Other Options

Opponents, who had included representatives of county government, argue that those cities made their own bed by deciding not to levy property taxes--because they were afraid to take the political heat or didn’t need the money or for some other reason. They say that cities strapped for money could raise it in other ways, such as by raising utility taxes, business fees and sales taxes.

The biggest potential winners are cities that never had a property tax. Those include Simi Valley, Camarillo and Thousand Oaks, each of which would receive $1 million a year. Those Ventura County communities, along with Moorpark, also would begin receiving 20% of the property-tax money generated by new construction.

In Los Angeles County, Agoura Hills, Hidden Hills and Westlake Village would receive 10% of the property-tax revenue generated by growth within their boundaries. The bill also would guarantee that those three cities receive at least $300,000 a year in property-tax revenue.

For Westlake Village, the income guarantee would be $80,000 to $130,000 a year, and the 10% growth provision would provide another $100,000 to $200,000. Agoura Hills would receive about $90,000; Hidden Hills, at least $200,000.

Extra Funds Could Become Crucial

Some officials said the extra revenue is not crucial now but could be later, when roads, bridges and sewer systems age.

“There is no immediate need for the property-tax revenue. We are still experiencing growth,” said Paul Larkin, assistant to the city manager of Thousand Oaks. But, he noted, “We look at this as an opportunity that may never come again to correct this inequity.”

Officials of several cities said they would use their windfalls for such projects as beefing up law enforcement, repaving roads and replacing utility and water lines.

The five affected counties--Contra Costa, Riverside, San Bernardino, Los Angeles and Ventura--had vigorously lobbied against the bill because it would force them to share revenue with the cities. They endorsed the measure after a compromise ensured that they would not suffer financially. The money taken from the counties would be offset by state money from increases in vehicle license fees.