Mission Viejo to Study Rebate for Taxpayers

As a weakening California economy forces many cities to cut programs, services and personnel, the Mission Viejo City Council will consider a proposal to return a total of $10 million in tax rebates to its citizens.

Under a plan proposed by Councilman William S. Craycraft, the city would dip into its cash reserve--believed to have a balance of about $30 million--to distribute refunds of about $500 to each Mission Viejo taxpayer.

“My basic philosophy is if there is money in the bank collecting dust, it ought to be returned to the people who contributed it,” said Craycraft, who will formally announce the plan at a press conference this morning. “I don’t know too many citizens (who) will object to getting money back.”

While the notion of a tax rebate has been informally discussed in Mission Viejo for several months, according to council members, Craycraft’s proposal is the first that will be taken up in a City Council session. Council members already are cautiously expressing hopes that if passed, the rebate will jump-start the sluggish local economy. If approved, the rebates would be the first of their kind in Orange County, and, perhaps, in the state.

“In a year of recession, it would certainly set us apart from all the other municipalities in California,” Councilman Robert D. Breton said. “I strongly support some form of tax rebate. I think it would significantly spur the economy of Mission Viejo.”

Under Craycraft’s plan, citizens would pick up their rebate checks from City Hall on the April 15 deadline for submitting state and federal tax returns. Craycraft declined to release any further details until this morning’s press conference.

The council will consider the rebates at its meeting next Monday. Council members polled Monday suggested that some form of tax rebate--either Craycraft’s plan or a modified version of it--has a good chance of being approved. At least two other members of the five-member council have tentatively expressed support of returning money to citizens from the city’s reserves.

City Manager Fred Sorsabal declined to confirm that there is $30 million in the city’s budget reserve or assess the impact of the tax-rebate proposal, saying he needed to study the issue.

William Hodge, executive director of the Orange County chapter of the League of Cities, said the rebates would be a first in Orange County, if not the state.

“I haven’t heard of anything like this before,” Hodge said. “Most of the cities in Orange County are setting up committees to figure out how to cut services. In times like this, when cities are hurting, the idea of a rebate is pretty remarkable.”

Hodge said that newly incorporated cities such as Mission Viejo, which became a municipality in 1987, are in a better financial position than older cities because they get a tax-revenue break from the state for several years. Many newly incorporated municipalities also cut their overhead by starting out with fewer employees and fewer facilities to maintain.

Mission Viejo, which has a fiscal 1991-92 budget of $27.5 million, has reduced its costs by maintaining one of the lowest employee-citizen ratios in the county, with 65 city workers serving a population of about 73,000. The city currently rents an office building at 26522 La Alameda that serves as City Hall, although the council approved plans earlier this year for an $18-million Civic Center complex.

Mayor Robert A. Curtis said he had planned to bring up the possibility of tax rebates in the annual state of the city address next Monday--coincidentally, at the same session the council will consider Craycraft’s proposal.

“I will be proposing (in the address) that a rebate be analyzed,” Curtis said. “I would propose to establish a committee to analyze ways of rebating our surplus tax dollars.”

Curtis said he favors a rebate of about $5 million but warned that further studies will be necessary before the council can establish how much it can safely return to its citizens.

Curtis also accused Craycraft of forming an alliance with a political rival to draw attention from his speech next Monday.

The Mission Viejo mayor has been “strongly” considering running for the newly formed 71st Assembly District seat that will encompass Mission Viejo, Orange, Lake Forest and parts of several other communities. One of Curtis’ main opponents would be 67th District Assemblyman Mickey Conroy (D-Orange), who plans to run for the new 71st District seat and will be appearing with Craycraft this morning to support the tax rebates.

“I think word of my idea has gotten to the Conroy campaign and they have orchestrated Craycraft to upstage me,” Curtis said. “Although, I’m sure taxpayers could care less who is upstaging whom.”

Both Conroy and Craycraft denied any political motives in the timing of this morning’s press conference.

“I chose this day because it’s Christmas Eve, a traditional time of giving,” Craycraft said. “I had no idea that Curtis had this idea before me.”

The two councilmen have often been at odds with each other over the past 18 months. Both will be up for reelection in November, 1992.