Property Tax Break Urged for Newcomers Over Age 55

Hoping to boost a sluggish economy, Supervisor Maggie Erickson Kildee has asked the Ventura County Board of Supervisors to allow senior citizens who buy houses locally to retain the low property taxes they had on homes in other counties.

The proposal, which is set for debate on Tuesday, is expected to spur business activity by luring about 200 elderly home buyers a year from crowded areas such as Los Angeles and Orange counties.

“The economic ‘trickle down’ from the infusion of new money in the community could affect a large variety of county industries such as real estate, home furnishings, landscaping and all the other businesses utilized daily by residents of a community,” Erickson Kildee says in a letter to the board.

“My gut tells me there would be a benefit,” the supervisor said Friday. “And it would be a good-faith gesture to the business community by the board.”

The new ordinance, however, would also reduce property taxes countywide by an estimated $387,000 a year--with cities, schools and county government all losing about $129,000, according to County Assessor R. J. Sanford.

The same proposal was rejected by the Board of Supervisors in 1989 as too costly and unneeded, because houses were then selling within days in a heated market.

And today, not all county officials are convinced that financially strapped local governments can afford to cut taxes.

Supervisors John K. Flynn and Susan K. Lacey joined the county’s chief administrator, Richard Wittenberg, in expressing concerns last week about the tax break for senior citizens, Erickson Kildee said.

The discussion was at a meeting of the Council on Economic Vitality, which the supervisors formed recently to gather ideas from business on how to help stimulate the county’s economy.

“I’m always concerned when any money is lost,” Wittenberg said Friday.

Last month, the supervisors approved a 2% across-the-board budget cut to make up for a projected $7-million deficit over the next 17 months. About 10% in cuts have been made since January, 1991.

Forty-six of California’s 58 counties have rejected the same tax break for senior citizens because of tight budgets, Wittenberg said.

“Maggie may have a very convincing argument,” he said, “but this is an area where who knows what (the benefits are) for sure.”

The proposed ordinance would allow new residents who are over 55 to transfer from other counties the low tax rates that were locked in by Proposition 13. The tax break would apply only to those who purchase houses after the ordinance is adopted.

Proposition 13, the landmark 1978 initiative, reduced the taxable values of real estate to 1975 levels and allowed the values to be increased by just 2% a year unless the property was sold.

The result in Ventura County is that 21% of homeowners pay taxes on houses still valued at about $60,000, Sanford said. The actual median value of homes is about $235,000.

Although the new county law would grant older home buyers a tax break, these newcomers would probably have enough money to churn the economy by buying cars, furniture and many other products and services, Erickson Kildee said.

“That’s what tips the balance for me,” the supervisor said.

Since tax-rate transfers were allowed by a state initiative in 1988, Erickson Kildee and Supervisor Maria VanderKolk have received many inquiries from Los Angeles County residents wanting to move to Ventura County, the supervisors said.

“We have received a lot of feedback from the senior community and the real estate industry saying that seniors aren’t moving here because they can’t take advantage of Proposition 90,” VanderKolk said. “They’re showing houses to seniors and when they find out they can’t transfer their property taxes, they’re not interested any more.”

Sanford said he favors the transfers not only because they were approved by more than 70% of voters statewide, but because the senior citizens they bring to the county would have money to spend and require few government services.

“They don’t join many gangs,” Sanford said. “They don’t require special services as do many segments of the population.”

In addition, the taxes lost to the transfers would be less than 1/1000th of the county’s $450-million tax base, he said.

Statewide, only three rural counties have approved the transfers--Modoc, Inyo and Kern. The nine urban counties that allow them are Los Angeles, Orange, San Diego, Riverside, Alameda, Contra Costa, Marin, San Mateo and Santa Clara.

David Oppenheim of the California Assn. of Counties said he hears very little about inter-county tax transfers today.

“The phone calls I do get are real positive,” Oppenheim said. “To the extent that counties have it, people really want to take advantage of it.”

Oppenheim said the most interest comes from residents of Los Angeles County, who want to move to less congested counties but also want to retain their low property taxes.

Under a 1986 initiative, senior citizens can move within all 58 counties and still retain their tax rate if they buy a dwelling of equal or lesser value. The same standard housing cost is used for inter-county transfers.