Two Counties Told to Repay Property Taxes

Two Southland counties will have to repay an estimated $14 million in property taxes they withheld from cities, schools and special districts in a flap over tax collection and jail booking fees, a Sacramento Superior Court judge ruled Thursday.

Judge James T. Ford found that a 1990 state law does not allow county tax collectors to seize property taxes to recover newly imposed fees that some cities have balked at paying to book prisoners into county jails. Any money seized so far will have to be returned, the judge said.

Nor can the counties impound taxes owed to schools and special districts to cover property-tax collection fees that many counties began to charge in July, 1990, the judge said.

In Southern California, the ruling affects financially strapped Ventura County, which must repay $5.8 million in property taxes it has withheld, and San Bernardino County, where officials said they apparently will have to pay back about $8 million.

The ruling could be only a temporary setback for counties, however, because Ford’s decision considers only whether tax seizures were legal, not whether counties are entitled to charge the new fees.

A hearing on that central question is set for Feb. 7 in Sacramento.

Many cities, schools and special districts have challenged the fees as unconstitutional and refused to pay up.

Ford said in an interview that he did not know how many of California’s 58 counties have impounded property taxes to collect the fees, which were approved by the Legislature last year to replace part of $700 million the state cut from county budgets.

The judge said he thought that only a few counties had seized property taxes and that his ruling would not be very disruptive to county budgets.

In fact, Elizabeth Hanna, the lead attorney representing more that 100 California cities in the Sacramento case, said that her interpretation of Ford’s ruling was that counties must stop seizing the taxes--not that they necessarily would have to pay back money impounded over the last 1 1/2 years.