Mission Viejo to Consider Tax Rebate for Residents

As many cities struggle with deep cuts in services, the Mission Viejo City Council is about to consider a proposal to return $10 million in tax rebates to its residents.

That translates to about $500 per taxpayer, said Councilman William S. Craycraft, who is proposing the rebate plan. He said the city could fund the program by dipping into its cash reserves, which he said contain $30 million.

“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.”

The notion of a tax rebate has been informally discussed for several months by council members since they adopted a 1991-92 budget of $27.5 million. But council members said Craycraft’s proposal is the first that will be taken up in session by the City Council. Council members already are cautiously expressing hopes that the rebate, if passed, would jump-start the sluggish local economy. Discussion of the issue is scheduled for Monday’s council meeting.

“In a year of recession, it would certainly set us apart from all the other municipalities in California,” said Councilman Robert Breton. “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 deadline for submitting state and federal tax returns--April 15.

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 recently incorporated cities such as Mission Viejo, which became a municipality in 1987, are better off financially than older cities because new cities get a tax revenue break from the state for several years.