Prop. 90 Fallout Makes Relocating a Taxing Problem : Random implementation of property tax transfers is affecting home purchase decisions of ‘over 55’ set.

Rowleen Smith, 66, was counting on Proposition 90--which permits homeowners 55 and older to take their property tax bills with them when they relocate within California--to ease her move from North Hollywood into retirement in Ventura County.

She bought a house there for $210,000, expecting to be able to transfer the $540 annual property tax bill from her present house, which she has listed for sale at $315,000.

“When I voted for Proposition 90 last November, I expected it to be implemented by all the counties, so I didn’t give it a thought when I went house hunting in Ventura,” she said.

Ventura, however, is one of 15 counties whose boards of supervisors have rejected implementation of the measure.

“I’ve worked all my life to move to where it’s cool in the summer,” Smith said. “ . . . I don’t see how I can afford the $2,400 annual taxes that the Ventura house will have.”

Smith is one of the millions of Californians who voted for Proposition 90 last November--it passed by 69% of the vote statewide--who are finding that some boards of supervisors have rejected the tax transfer. They claim it is a drain on already strapped budgets.

The 14 other counties that voted to reject Proposition 90 are Santa Barbara, Sacramento, Fresno, Madera, El Dorado, Mendocino, Monterey, Napa, Nevada, Santa Cruz, Stanislaus, Tulare, Sonoma and Solano.

Eight counties--Los Angeles, Orange, Riverside, San Diego, Kern, San Mateo, Marin and Contra Costa--have implemented Proposition 90.

For Glyn Payne, 63, a retired Long Beach police officer, the vote by Riverside supervisors to implement Proposition 90 was a major factor in his retirement relocation.

Buying in Murrieta

He’s selling his three-bedroom house in the Los Altos area of Long Beach and buying a four-bedroom house in Murrieta, near Rancho California in Riverside County.

“The purchase in Murrieta, for $192,000, was contingent on the implementation of Proposition 90 in Riverside County,” he said. “I’ve got the house in Long Beach listed for $245,000. We bought it in 1954 for $11,500, and the property taxes are about $400 a year.”

To qualify to transfer his property tax bill, a homeowner must be age 55 or older and must buy or build a replacement home of equal or lesser value than the sale price of the dwelling being replaced, within two years of the sale.

Riverside County, with a population estimated at 960,700 in April, 1988, is expected to be a major destination for those taking advantage of Proposition 90, according to Dick Robinson, president of the Riverside Board of Realtors.

“Because of its relatively affordable housing, people move here, not away from here,” he said. According to state figures, Riverside County gained 11,426 people age 45 and over from July, 1987 to June, 1988 from the other 57 counties.

Gary Stange, a senior appraiser in the Riverside County Assessor’s Office, said he estimates that about 5,000 people a year will take advantage of Proposition 90 tax savings.

The breadth of the anti-Proposition 90 implementation trend surprises its author, Assemblyman Dave Elder (D-Long Beach), who said that a goal of the measure is to make it affordable for older homeowners to sell larger houses they no longer need and to move to smaller ones.

Backed by AARP

“To get the measure on last November’s ballot, we had to put in the provision that each county had the option of implementing or not implementing (it),” Elder said in a telephone interview from Sacramento.

“Unfortunately, there was, at first, very little in the way of a sales job to convince county supervisors throughout the state that there is much that is positive about Proposition 90.

“This is being remedied by a massive effort by the American Assn. of Retired Persons (AARP) to persuade county boards that implementation of Proposition 90 won’t drain treasuries.”

The AARP was instrumental in the successful vote in Riverside County and the 4-0 victory in Los Angeles County, he said.

Elder spoke at the March 30 Los Angeles County supervisors’ hearing, along with Los Angeles County Assessor John J. Lynch, who has favored implementation of the measure since it passed in November.

Symbolic in Los Angeles

A spokesman for Lynch said implementation of Proposition 90 is chiefly symbolic in the county because few people retire to Los Angeles from other counties in California.

AARP volunteer Dan Cartagena said that according to the most recent data on driver’s license address changes--a reliable way of calculating movement trends among counties--Los Angeles County, with 8,591,000 residents, had a net loss of 27,754 persons age 45 and older to the other 57 counties between June, 1987, and July, 1988.

“We don’t expect any one county in California to be inundated with people applying for Proposition 90 status,” said Dave Cunningham, legislative specialist in AARP’s national headquarters in Washington. “It’s been our experience that the overwhelming number of people don’t move when they retire.”

Tarzana resident R. P. Elworthy, 57, does plan to move, and he isn’t picky about where. He just wants to relocate to a county that has implemented the proposition.

Seeks Coastal-Area Home

He recently sold his large house for more than $400,000 and is looking for a two-bedroom house in a coastal area. He said it must be in a county that has implemented Proposition 90 because he needs to take his $772 annual tax bill with him to the replacement house.

“I don’t want to spend more than $150,000 (for a home), and I’ve been looking up and down the coast from Monterey to Oceanside,” Elworthy said.

Cary Jung, a legislative analyst for the County Supervisors Assn. of California, said rejection of Proposition 90 application “isn’t so much Northern California versus Southern California as it is a rural versus urban attitude.

“A lot of the counties that have rejected it have been the destinations of many retirees from both the San Francisco and Los Angeles areas, and they’re concerned that Proposition 90 will be a major revenue drain.”

Pat Dundon, administrative services officer for Nevada County, said his county is typical of those rejecting Proposition 90.

Dundon said the county, with a population of about 77,000, would lose $4 million over a 10-year period if Proposition 90 is implemented. He added that the county government would lose $1 million in capital improvement funds.

Cites Greater Impact

“Since we’re a retirement destination, with more older people coming in than going out, the impact will be far greater on us than it would be on the county sending people to us,” Dundon said.

Based on driver’s license transfer data, Nevada County gained 1,109 people who are 45 and older from June, 1987 to July, 1988, coming from all the other counties in the state, he said.

In defense of his county’s action, Dundon pointed out that the law wasn’t based on need, just on age:

“We have cases of people selling their houses for more than $500,000 and buying a house up here for $250,000 or less. Someone like this obviously doesn’t need a tax break.”

Gil Martini, a 72-year-old retired service station owner, is one such a retiree.

Dislikes Congestion

Martini is fed up with the congestion of Los Angeles and is selling his West Los Angeles house to buy one in the Paso Robles area of San Luis Obispo County.

He would like to take his $800 annual tax bill with him, but San Luis Obispo County has turned down implementation of Proposition 90. He plans to move there anyway.

“I’ll get between $300,000 and $400,000 for a house that cost me $27,000 in 1967,” he said. “The houses I’m looking at in Paso Robles will give me a tax bill in the $2,400-a-year range, but the area is close to my friends and family and I like it.”

The biggest county to reject Proposition 90 has been Sacramento.

Barbara Graichen, a senior planner there, said implementation would cause a “huge revenue loss--between $855,000 and $1.680,000 in total countywide losses by 1995.”

Not All Retirees

She said Sacramento County has affordable housing prices, especially compared to Alameda, San Francisco, San Mateo, Santa Clara and Los Angeles counties, the counties that account for the largest number of people moving to Sacramento County, according to driver’s license address-change data.

“We see people coming here who aren’t retired, since Proposition 90 specifies that only one spouse be over 55 years old,” Graichen said, citing the expansion in communities such as Roseville and Folsom of high-tech firms based in the San Jose area.

Driver’s license transfer data indicates that about 2,000 people who would be potentially eligible for Proposition 90 move into Sacramento County each year, according to the AARP’s Cartagena. “That’s hardly an influx, since not all the people who move are homeowners.”

When new San Diego County resident Hal Ballon learned that supervisors there had voted to implement Proposition 90 and that it would save him and his wife more than $2,700 a year in property taxes, he “jumped for joy.”

Working on New Job

Ballon, 59, formerly a manager for Barish Chrysler Plymouth in Los Angeles, is working in a similar position at La Mesa RV Sales. His wife retired after 25 years as a nurse in the pediatrics clinic at Cedars-Sinai Medical Center.

“We paid $35,000 for our 3,000-square-foot Glendale house in 1970 and sold it in one day for $350,000,” Ballon said.

“Our property taxes were $770 a year and they would have been $3,500 a year for the two-bedroom, 1,600-square-foot townhouse in Del Mar that cost us $350,000.”

San Diego County Assessor Gregory J. Smith isn’t worried about an influx of people like the Ballons. Smith, who supported the unanimous decision by the supervisors to implement Proposition 90, said he expected the financial impact to the county to be minimal.

Effect Minimal

“With our high home prices and something like 160,000 reappraisals last year, the effect of Proposition 90 will be minimal,” Smith said.

“Frankly, the kind of people who will move here to take advantage of Proposition 90 are the kind who require the least amount of services and bring the most amount of money.”

But Smith added, “If I worked for a smaller county, with only a few hundred transactions a year, I’d probably recommend against implementing Proposition 90.”