L.A. Deluged With Appeals of Assessments : Revenue: Applications contesting property valuations threaten to overwhelm the system. The crisis could cut into county tax income.

Already confronted with the gloomiest fiscal picture ever, Los Angeles County officials report that homeowners are contesting property valuations at such a furious rate that they threaten to overwhelm the appeals process, potentially cutting into the county’s tax revenues.

In an Oct. 1 memo to the Board of Supervisors, county officials warn that the number of property owners filing assessment appeals has prompted a bureaucratic crisis and poses a threat to the county if steps are not taken to treat the problem.

“Clearly the potential impact of this large number of appeals will mean delays in providing taxpayers with their hearing . . . and may also have a serious impact on the county’s property tax revenue,” county executive officer Larry Monteilh wrote.

Much of the problem appears to stem from the region’s depressed real estate market, with many homeowners hoping to cushion financial losses by declaring a decline in property values.

Other appeals appear to be of questionable merit. No matter what the reason, the numbers are staggering. So far this year through Sept. 24, the county took in 33,676 applications--the equivalent of 6 1/2 years of a normal workload.

The steep rise is graphically illustrated by the number of appeals received on one day, Sept. 15. The county received 5,785 applications--hundreds more than are typically received during a year.

The staff of the assessment appeals boards is so overwhelmed that county officials fear they will not be able to process claims within the two-year legal limit. If the board fails to do so, the applicant’s opinion of value (usually lower) becomes the basis on which property taxes are collected. That could lead to lower county tax revenues.

Monteilh, in an interview Thursday, said the onslaught of appeals began in April when the county tax assessor’s office, following a review of property tax values, announced a wholesale lowering of tax bills, affecting about 240,000 homeowners.

“That heightened people’s awareness,” Monteilh said. “Letters were sent not only to people whose bills were lowered but to people whose bills were not lowered. The great majority of appeals are from those who think the assessor got it wrong, that their bills should be lower so they won’t have to pay as much tax.”

Recent state laws have also made it easier for homeowners to have their property reappraised to reflect a decline in valuation because of market conditions. That has led to the practice of some real estate agents and attorneys filing appeals on behalf of hundreds of clients at a time at no upfront cost to the applicant.

“We’re beginning to see some of the same names come up over and over again . . . and we know there’s a darn good chance that most of the applicants have no case,” Monteilh said.

But such appeals--in one recent case an agent filed 800 applications at one time--clog the system and make it more likely that some big business interest, with a multimillion-dollar tax bill, might slip through the cracks.

Monteilh said his staff is studying a variety of long- and short-term strategies to address the problem. Most immediately, the county will begin sending out postcards to warn appeals applicants of potential delays. Other remedies include hiring temporary clerical help and revamping computer systems to speed processing of cases. It is also likely that the staffs of the county’s three appeals boards will have to work longer hours.

Ultimately, Monteilh said, changing state laws to extend the appeals process may provide the only long-term relief.