Santa Clarita Schools Affected : Senate OKs Mechanism for Collecting New Tax

The state Senate on Friday gave final approval to a bill to set up a mechanism for five Santa Clarita Valley school districts to collect a controversial tax on new homes.

The measure, approved by a 37-0 vote, now goes to Gov. George Deukmejian for consideration. Sen. Ed Davis (R-Valencia), who carried the bill on behalf of the school districts, expressed optimism that the governor will sign the legislation.

Davis, whose office helped hammer out a compromise between the schools and builders opposed to the tax, said: “I’m glad we were able to get all the parties together and work out a civilized arrangement.”

In June, voters in the Newhall, Saugus Union, Castaic Union, Sulphur Springs Union and William S. Hart Union High school districts approved the tax, which could amount to as much as $6,300 for each new home in the booming Santa Clarita Valley. The funds are needed to build classrooms.

Despite the June vote, there was no legal way to collect the funds. Davis sought to authorize collection of the funds, but the bill was opposed by the Building Industry Assn. of Southern California, prompting Davis to seek the compromise. Meanwhile, the builders filed a civil suit to overturn the results of the election. Last month, a Superior Court judge refused to set aside the results, and the builders have said they plan to appeal.

Davis’ bill specifies that, until the case is settled, builders will be required to pay only fees in place before the June 2 election. It also directs the courts to give priority to the case and spells out that, should the schools win, they have the authority to collect the tax from developers.

Passage of the bill was praised by Santa Clarita Valley school officials but criticized by the building industry association as unwarranted legislative interference with its lawsuit.

‘Could Prejudice the Case’

“Writing legislation on a case that is being litigated could prejudice the case in court,” said the association’s executive director, Richard R. Worth. He said attorneys for the schools can argue: “Well, look, Judge, if the Legislature didn’t think this tax was legal, why did they enact a mechanism to collect it?”

All legislative activity should have been suspended when the suit was filed, he said. “Let the courts decide the issue of whether this is constitutional or not, and don’t throw in things like this that muddy the waters.”

Reed Montgomery, superintendent of the Castaic district, said he was “very pleased” that the Legislature “supports our right to tax developers for the problem they create--from our point of view--the need for new schools.

“Now it is time for the developers in our area to sit down with us and come to an agreement that they have to set aside some funds or some sort of collateral that will guarantee that the districts will receive the taxes due us, if we win in court.”

Newhall Supt. J. Michael McGrath said school officials are “very pleased with the language in the bill expediting the court case because we want to get it behind us and start building schools.”

Hamilton C. Smyth, superintendent of the Hart district, said it had been “a long road” to passage of the bill.

“We’re not home free yet, but it’s a big step forward.”