Tax Break for Quake Damage Proposed

Gov. George Deukmejian on Wednesday proposed eliminating property taxes for up to three years on structures that suffered serious damage in the Oct. 1 earthquake that rocked Los Angeles.

The proposal, part of an $80-million package that also includes grants for earthquake victims and aid for local governments, came as the Legislature prepared for a special session next week on earthquake relief.

Some Democrats indicated that they would push for a broader package.

“What we must do is take your proposal under advisement,” Sen. John Garamendi (D-Walnut Grove) told two Administration officials who described the governor’s plan at a Senate Revenue and Taxation Committee hearing. “We need a lot more information. You really surprised us.”

Garamendi suggested that victims of this summer’s forest fires should be entitled to the same type of relief and indicated that he would try to broaden the Administration bill to cover fire losses.

Deukmejian’s press secretary, Kevin Brett, defended the Administration plan, saying it was based in part on the 1986 relief plan for flood victims. But he indicated that Administration officials might be willing to accept changes.

The 5.9 quake and about 35 aftershocks resulted in seven deaths and $255 million in damage, officials said.

Among other things, Deukmejian’s plan would eliminate, or defer, property tax payments for business and residential structures in Los Angeles or Orange counties that were damaged or destroyed by the temblor, said James Miller of the Department of Finance.

The plan would eliminate property taxes for three years on structures that lost more than 25% of their fair market value due to the quake or its aftershocks. If the market value fell between 10% and 25%, property taxes would be eliminated for a year.

Tax payments due this December on buildings that lost less than 10% of their value would be postponed until Feb. 1, 1988, although Miller said the Administration might agree to a later payment date.

The state would reimburse local governments to make up for lost property tax revenue.

Miller told the committee that there might be 500 to 600 structures that would qualify for the three-year tax exemption. But Assistant Finance Director Richard Ray said later that officials had no real idea of how many buildings would fall into each category.

The plan also includes $60 million to help repair earthquake-damaged public facilities and $10 million to supplement a federal grant program for earthquake victims. The Administration envisions spending $10 million for property tax relief.