School Tax Bill Advances in Assembly

In the latest chapter of a continuing dispute, the Assembly Ways and Means Committee on Monday unanimously approved a compromise to establish a way for five Santa Clarita Valley school districts to collect a tax on new homes.

The tax was approved by voters in June to raise money for school construction. Despite the approval, however, no legal mechanism existed to collect the money.

The bill to provide that mechanism, by Sen. Ed Davis (R-Valencia), now goes to the Assembly floor. If approved, it must be sent back to the Senate for concurrence on amendments.

On Monday, Davis overcame a major hurdle when, at the urging of the Southern California Building Industry Assn., he amended compromise language into the bill.

The amended bill specifies that until a pending court challenge to the tax is settled, builders will be required to pay only fees in place before the June 2 election.

Davis aide Charles Fennessey said that under the compromise plan, developers must agree that “if they lose, they will pay the amount in question and any reasonable interest the court would impose.”

After the amendment, Les Cohen, a lobbyist for the building association, said his group will no longer oppose the bill, but will not officially support it.

Davis’ bill also directs the courts to give top priority to the case and clarify that if the schools win, they have legal authority to collect the tax from developers.

The controversy has been mounting since voters in the William S. Hart, Newhall, Saugus, Castaic and Sulphur Springs school districts passed the tax of up to $6,300 for each new home in the fast-growing Santa Clarita Valley.

School officials have said that at least 25 new schools must be built at a cost of about $300 million to accommodate a student population expected to double to more than 40,000 by the year 2000.

Meanwhile, developers went to court, arguing that the school districts’ power to conduct the election was stripped by Proposition 62, a ballot initiative that took away special districts’ power to tax.