Stiff Tax Rise on New Homes Voted to Cover School Costs

To the alarm of the state’s housing construction industry, voters in the Santa Clarita Valley have overwhelmingly approved ballot measures to allow five area school districts to impose stiff taxes on new homes to pay for school construction.

The new taxes of up to $6,300 for each new residential unit approved Tuesday amount to more than three times what the school districts already are collecting under a statewide law that went into effect Jan. 1. The state measure allows school districts to collect $1.50 per square foot of residential construction.

Contending that the measures are illegal and amount to “taxation without representation,” the California Building Industry Assn. and the Building Industry Assn. of Southern California will go to court and attempt to have the election results declared invalid.

Builders fear that other school districts in fast-growing areas such as the Santa Clarita Valley also will hold elections proposing similar taxes, because voters who are unwilling to tax themselves will not hesitate to stick newcomers with the bill for school construction.

“This is a property tax, that’s what it is,” said BIA spokesman Richard Wirth. “. . . It’s not fair to tax people who aren’t even living there yet.”

Increase in Prices

Wirth said developers will inevitably pass the tax on to home buyers, pricing some out of the market.

“We will go to court as soon as the election is certified,” said Wirth. He said the action against the Santa Clarita Valley districts--Castaic, Newhall, Saugus, Sulphur Springs and William S. Hart--will be the industry’s test case.

“It’s an issue of statewide importance to us,” he said. “We maintain the Santa Clarita Valley taxes are illegal.”

Last month, the two groups appealed all the way to the state Supreme Court in an attempt to block the election altogether. But the court, without ruling on the merits of the case, allowed the election to proceed.

Max Halfon, attorney for the two developer groups, said the election should be declared invalid because, under state law, school districts do not have independent authority to pass special taxes.

However, Terry Dixon, attorney for the school districts, said that the 1978 Proposition 13 property tax measure authorized school districts and other taxing agencies to impose taxes for special purposes if approved by two-thirds of the voters. The measures considered Tuesday in the Santa Clarita Valley each won approval of at least 75% of those who voted.

“They are perfectly within their rights,” he said.

Dixon said the Santa Clarita Valley levies are taxes--not fees--and as such can be imposed if earmarked for special purposes.

The industry supported state legislation allowing the $1.50 per square foot fee for new schools, Wirth said, because developers believed that that would set a cap on the amount a school district could force developers to pay for construction.

“The state Legislature already has spoken,” he said.

Viewpoint of Schools

Dixon and school administrators maintain that the state financing plan does not preclude school districts from levying more taxes to build schools.

Santa Clarita Valley school administrators maintain that the money raised from the state-sanctioned fee--an average of about $2,000 per new home--would provide only about one-third the amount needed to finance school construction in the area. They also contend that there is no guarantee that they will ever receive any funds from the state for schools.

The state’s voters also approved an $800-million bond issue for school construction in November. But with statewide student enrollment in kindergarten through high school expected to increase by 600,000 by 1994, crowding problems have intensified. Enrollment in the Los Angeles Unified School District alone, for example, is going up by 15,000 students a year--the equivalent of adding a new average-sized school district in the state each year.

School construction projects costing $3 billion are waiting to be financed, but only $700 million has been set aside by the state to pay for them, said Clyde Smyth, superintendent of the William S. Hart Union High School District. Santa Clarita Valley school districts are waiting in line with their requests, Smyth said, but, “We may never see any of that money.”

Population Growing

In the Santa Clarita Valley, the population is expected to increase from its present 106,000 to about 270,000 by 2010. Smyth said the school districts’ consultants have predicted the five districts must raise about $300 million to build at least 25 new schools to house a student population that is expected to double to 40,000 in the next 25 years.

Smyth estimated the new tax will raise $100 million of the amount needed for the new schools.

“We’re just doing what we’re mandated to do by law,” he said. “We must find ways to house new students.”

Earlier, BIA spokesman Wirth urged that the districts hold a general obligation bond election to spread the tax burden equally among present and future residents.

However, school administrators and community leaders noted that most school-district finance proposals that involve more taxes have been rejected by voters in recent years.