A Lesson on Property Taxes – Times Herald Online

First, a little history is in order. It is important that citizens understand how we got to this point in the tax battle. Citizen initiatives have been crucial in preventing governments from taxing us excessively to finance their spending habits.

Proposition 13 was approved by California voters in 1978. It limited property taxes to 1% of the initial assessed value, with an annual escalator of 2% to reflect higher property values. It is Article XIII.A of the state constitution.

The state legislature immediately sensed the crisis and launched programs to generate new revenue. Mello-Roos – the community benefits assessments that appear on many of our annual property tax returns – and others came as quickly as lawmakers could pass.

Prop. 62 was passed in 1986 to curb these abuses. It said that any new government demands, whether called fees, levies or whatever, had to be approved by voters. It’s in Article XIII.C of the state constitution.

Have governments stepped up and started living within their means? No.

The next evil was the 1993 Educational Revenue Enhancement Fund (ERAF). The state took a portion of local property taxes, much of it for schools, to balance budgets. It promised to compensate the schools’ losses.

Did the state keep that promise? No.

Prop. 218 was put to the vote in 1998. It lowered the requirement from 2/3 majority for general taxes to one majority. It became Article XIII.D in the state constitution. It strengthened the limits and notices stated in earlier sections of Article XIII.

Prop. 39 was put to a vote by the legislature in 2000. Its stated purpose was to help schools pay for much-needed new construction and modernization. It lowered the voter approval requirement for school construction bonds to 55%, provided certain criteria were met. Chief among these was the requirement for a list of specific projects to be financed with bond revenues. That way, voters could decide whether the promised improvements justified the costs. It passed.

So how does all this relate to the issuance of the Fairfield-Suisun Unified School District and its Bond Anticipation Note (BAN), a five-year, $55 million loan that must be repaid when the Measure S bonds are eventually sold.

We told the county council that the interest on the loans would be greater than the interest on the bonds, that it had to sell the bonds, and that there was no legal reason not to do so.

The school board ignored us and passed the BAN resolution.

To further damage, the district wants us to pay the interest on the loan by adding it to our property tax returns. She claims this is allowed by Section 15150 of the State Education Code.

What we find is that the article in the Education Code conflicts with Article XIII.C of the State Constitution. The Constitution prohibits the district from imposing such a charge on us without a vote on it.

There can be no conflict. The state constitution is more important than state law.

The school district is asking Solano County to make us pay the BAN interest. We have alerted the county to the conflict between the state Constitution and its Code and asked that it investigate our challenge. The school district is aware of our action.

This issue affects the entire country. It is extremely important that Solano County gets it right.

Stay tuned.

— John Takeuchi/Member, Central Solano Citizen Taxpayers Group, Fairfield