LOCAL ELECTIONS / VALLEY CENTER : Law Would Create Tax District for Schools : Education: If the Mello-Roos district is approved, future home buyers would pay a $750-a-year fee on detached houses and $350 a year for condominiums.

When are people most likely to vote for a tax increase? When they don’t have to pay for it.

A ballot measure to create a taxing district in the Valley Center Union School District would levy a $750-a-year fee on detached houses and $350 a year for condominiums in the special district.

Only 36 landowners in the district, most of them residential developers, are eligible to vote, and ballots must be received by the county registrar of voters by 5 p.m. today.

But the people who will pay the tax are the future home buyers in the 4,177-acre district. The money would go toward building schools to serve those now nonexistent households in a nonexistent neighborhood.

Right now, the area is mostly orange and avocado groves and other undeveloped land.

The idea is to anticipate where future development will occur and plan for the funding and location of schools to serve the new population before it gets there, said Jeff Mulford, superintendent of the Valley Center Union School District.

Unlike developers’ fees, a Mello-Roos district, which requires a two-thirds approval of those in the district, allows schools to sell bonds in advance of the construction of the homes, allowing the school district to purchase a site for a campus and build the school while the houses are being built.

The Valley Center Mello-Roos district would have a life of 30 years.

If the Mello-Roos district is approved, Valley Center would become the fifth district in the county in the last five years to have such a tax-raising entity.

Since the passage of a 1982 law that allowed for the creation of Mello-Roos districts, more than 250 municipalities and special districts in the state have taken advantage of the law.

Not until recently, however, did schools begin to use the law.

“The school people are getting more sophisticated in using alternative vehicles of financing construction of schools, and this is one vehicle they are using,” said Pamela Montgomery, facilities planning analyst for the San Diego County Office of Education.

The Mello-Roos district has several advantages over other forms of revenue-raising--such as general-obligation bond elections--that school districts have used in the past.

The boundaries of the tax district can be shaped in virtually any manner, and tax rates and the area taxed may be tailored to please the most voters possible.

Also, unlike general-obligation bonds, which may be used only for school construction, the money raised in a Mello-Roos can go toward a wide range of uses, including school furnishings and buses.

In fast-growing areas of the state where cities and schools are struggling to keep up with the pressures of a growing population, the Mello-Roos is even more attractive.

“One of the advantages of the Mello-Roos is that the local need generated by new development is paid for by the development as opposed to being spread across the entire school district’s boundaries,” said Andrew Schmerl, an associate with Taussig & Associates in Irvine, finance consultants to several school districts.

There are down sides, though.

The new tax districts can be confusing, particularly to voters who must approve them.

“A Mello-Roos often exempts some special categories of taxpayers or has different rates of taxation, and that kind of intricacy can create confusion or mistrust in certain circumstances,” said school finance expert Anthony Cone, a principal with Westhoff-Martin & Associates.

Confused voters either don’t vote or vote no on taxes, Cone said.

Also, if a homeowner in a Mello-Roos is delinquent in paying the property tax, the school district has authority to foreclose on the home after six months. Under normal circumstances, the state will fine a person for not paying property tax on time but won’t try to foreclose on the property for five years, Cone said.

If a residential development within the Mello-Roos fails and does not sell the houses, the school district could be forced to foreclose on the development, Cone said.

Mello-Roos bonds generally also have higher bond interest rates and bond issuance costs, meaning more of the money raised must go toward paying interest on the bonds.