Veto Delays El Segundo’s Tax Relief Legislation

Gov. George Deukmejian’s veto of special legislation intended to boost El Segundo property tax revenue puts the city in a “holding pattern” until technical flaws in the bill can be cleared up next year, a city official said this week.

Donald Harrison, assistant to the city manager, said the delay will not cost El Segundo any money, since beneficial features of the bill (Senate Bill 2832) would not have taken effect until 1990 anyway.

Harrison said he is confident that a corrected version of the bill will make it through the Legislature next year since both houses passed it unanimously the first time around, and that the city ultimately will receive the $5-million benefit it expected.

In vetoing the bill, Deukmejian noted that it was tied to a trial-court funding measure that had been repealed by passage of another law.

But, he said, “I have no problem with the substantive provisions of this legislation and will sign legislation next year that eliminates this technical problem.”

The vetoed measure, which affected only El Segundo, would have authorized Los Angeles County to raise the city’s share of property taxes collected in El Segundo from 4.5% to 7%, with the increase phased in over three years instead of seven.

Under another bill (SB 612) that Deukmejian signed recently, a number of cities, including El Segundo, will receive larger tax shares, phased in over the 7-year period, to offset losses they incurred with the passage of Proposition 13 in 1978.

Those cities were imposing low property taxes or none at all in 1978 and thus were locked out of Proposition 13’s new formula for distributing such taxes. For El Segundo, Harrison said, that has made it increasingly difficult to balance the city’s budget, which is $29 million this year.

He said he was aware of no opposition to the El Segundo bill from the county or any other interests, since it was clear that the city was in a “highly inequitable position.”

“The county’s share of taxes collected in El Segundo is greater than any county receives from any city in the state, and I think everyone recognizes that the situation should be corrected,”.