State Supreme Court to Review Invalidated Metro Rail Tax Plan

The state Supreme Court has agreed to review a lower court ruling that threw out a commercial property tax plan to finance the first stages of the Los Angeles Metro Rail system.

In seeking the high court review, Dorothy Wolpert, a lawyer for the Southern California Rapid Transit District, called the lower court decision “a potential roadblock to public works projects throughout the state.”

“If some public improvement which generally benefits the public confers a special benefit on property owners, those people ought to contribute a portion of their windfall,” she said Thursday, after the high court agreed to review the case.

Justices Allen Broussard, David Eagleson, Joyce Kennard and Armand Arabian, the majority needed on the seven-member high court, voted to grant a hearing on the transit district’s attempt to revive the tax.

The action nullifies a 2nd District Court of Appeal ruling May 1 that the tax plan improperly singled out commercial property owners, both to pay the assessments and to votein any referendum repealing the tax.

The tax, approved in 1985, would raise $130 million to build stations along the first 4.4 miles of the planned 18.6-mile subway line, from downtown Union Station to Wilshire Boulevard and Alvarado Street. Nearly $1 billion more for the first stage would be provided by the city, state and federal governments.

Concluding that commercial property values near the rail line would be boosted by the construction, the district ordered a tax on owners according to the size of their parcels. The Los Angeles City Council approved the plan after requiring a tax exemption for all residential property.

The tax, challenged by downtown property owners, was approved by Superior Court Judge Billy Mills but overturned by the appellate court, which said both the tax plan and the law authorizing it were invalid.

In a 3-0 appellate decision, Justice Lynn Compton said the transit district had no power under state law to exempt residential property from the tax.

“Only the Legislature possesses the power to exempt property from special taxation or local assessment,” Compton said.