Negative impact of lower tax returns may be less than feared
Concerns that lower property tax assessments caused by last year’s wildfires could severely impact Sonoma County’s many school, fire and other tax-supported districts seem overblown, at least for now.
Property taxes do play a major role in keeping the county running. The $389.8 million received by county schools for the tax year 2016-2017 constituted 48 percent of their entire budget, according to state records. Some special districts, however, including fire and school districts, counted on property taxes for just eight percent of their overall budgets.
State law requires counties to lower assessments on destroyed property.
Bill Rousseau, Sonoma County’s County Clerk-Recorder-Assessor-Registrar of Voters, hasn’t changed the estimated property tax reductions he announced last December, although the office is just finishing up mailing out all the reconfigured tax notices to property owners.
Rousseau said the county will lose approximately $3.5 million in reduced property tax revenues for FY17-19 and nearly $5 million for the next period, while school districts will see a reduction of about $2 million this year. School revenue impacts will not be nearly as high for the next fiscal year.
“I have not changed any of my early estimates,” Rousseau said in late January. “They may change by early February since we should be done with all the readjustments.” If you have any questions about your reassessment, wait to call until mid-February.
Eric Roeser, another multi-titled department head, did the actual recompiling. Roeser is the county’s auditor, controller, treasurer, and tax collector.
“A high percentage (of the total) were complete losses,” Roeser said. “We took off the structure value, adjusted some land values with total loss, for contamination and reconstruction of lots. We did studies of the costs and costs to clean, if partial damage, and we did a lot of site inspections.”
For both local schools and fire departments, property tax losses do not seem to be an issue.
Kenwood School District (KSD) is one of a few independent school districts in Sonoma County and has the good fortune to be better funded that most, due in large part to the high cost of local property and consequent high taxes.
Anne Kopache is KSD’s chief business officer. She noted that property taxes cover 78 percent of the district’s $2.7 million annual budget. That is more than the basic number set by the state for subsidies, which means they will absorb any losses without help from the state.
“We will be able to make up what’s lost from the general budget,” Kopache said. “We have enough cash flow to weather whatever is lost this year in parcel taxes. Next year will be another thing. This year is only partial; next year will be a whole year and the losses will continue until build out.”
Today, the county assessor’s estimate looks like a $39,000 hit for FY 17-18, jumping to $69,000 the following fiscal year.
Glen Ellen’s Dunbar Elementary School is in the Sonoma Valley Unified School District, whose revenues keep it on the borderline of the state subsidy level. They are unlikely to lose any revenue, according to Bruce Abbot, the SVUSD associate superintendent for Business Services.
“The way state schools are funded under a formula, where property taxes aren’t enough, the state backfills that amount. It’s a hit to the state budget,” said Abbot.
Kenwood Fire Chief Daren Bellach did not release any Kenwood Fire Department budget figures but said any drops in property tax revenues would not be a problem.
Glen Ellen Fire District is facing a shortfall of $20,000 for the 17-18 fiscal year, and $76,800 the next year.
“We have money in the bank,” Glen Ellen Fire District director Hal Weiss said. “We’d have to take it out to cover any losses, but we do have a two to three million dollar reserve. We are very frugal.”
Glen Ellen’s fire department, while still independent, is part of Sonoma Valley Fire & Rescue Authority (SVFRA), a much larger entity that serves the City of Sonoma and most of the communities south of Glen Ellen.
SVFRA Chief Steve Akre observed, “We are almost entirely dependent on property taxes.” That said, his district – excluding Glen Ellen – lost no structures in the fire.
“I don’t see there being much of any impact resulting from the fires,” Akre said. “What the potential is, is that if all of the tax agencies in the county were going to be apportioned based on their share of tax authority, they would all share in the apportionment of the revenue loss.”
Akre was bracing for a larger hit to the Glen Ellen budget. “If it stays where it is, especially if the state passes a budget with backfill included, I’ll feel a lot better about things.”
Tiny Mayacamas Volunteer Fire District lost 47 homes, nearly one out of three in the district. Board Chair Allison Ashe said they are likely to lose about $4,000 this fiscal year and going forward until homes are rebuilt and reassessed.
With a few exceptions, Sonoma County will spread the property tax reductions to every agency that receives tax revenues from any source.
State Senators Bill Dodd and Mike McGuire have urged Governor Brown to have property tax losses covered by the state’s budget, spreading the loss throughout the state’s taxpayers.
The Governor’s initial proposed budget for FY 18-19, published in January, includes backfill to cover county and city losses statewide for both FY 17-18 and 18-19. That figure will undoubtedly be changed in the May Revision and final budget, usually adopted in late June.
“I will be working with Senator McGuire and our colleagues in the Assembly to ensure that we build on that support,” Dodd said.