Up to 25,000 Property Owners Overpaid Taxes : Government: Lag in post-quake reassessments is blamed on county’s staffing shortage. Assessor says most problems have been corrected.

The owners of as many as 25,000 earthquake-damaged buildings in Los Angeles County paid too much in property taxes in December, the result of a lag in post-earthquake real estate reassessments.

Penalties were levied on some homeowners for failing to pay the overbilled amount. Although county Assessor Kenneth P. Hahn said most problems have been resolved, his office has yet to reassess about 2,000 structures, mostly condominiums and shopping centers.

Facing a deadline next Monday for payment of taxes for the 1994-95 budget year, owners of those 2,000 buildings are being billed based on the value of property 15 months ago.

“We’re sorry,” said Assistant Assessor Gary Townsend. “We wish we could have done a better job on it.”

Overall, property values dropped $5.5 billion as a result of the quake, officials said, causing a reduction in property tax revenues of about $55 million.

The reason for the assessment delays, said Hahn, was money. His department, charged with reassessing 67,000 structures and parcels of land, was so severely cut that he was forced to bring in retirees to help handle the work, he said.

In the wake of the January, 1994, Northridge earthquake, about 5,000 people applied for and received deferments on their April, 1994, tax bills.

By November, the county had reassessed about 25,000 properties and sent out refunds or corrected bills. But about another 25,000 owners who had applied to have their property reassessed were asked to pay based on the pre-quake worth of buildings and land because the county had not completed the work, Townsend said.

Owners who did not pay were assessed penalties based on the old values. Then, when their homes were reassessed, the penalties were adjusted.

By January, 35,000 properties had been reassessed. By last week, Townsend said, work on all but 2,000 properties was completed.

The assessor’s office said the county had only 31 appraisers and 15 clerks working on the reassessment project.

“If we could have thrown more money at it and had more staff available for it, we certainly could have gotten it done sooner,” Hahn said. “I think we’ve done a pretty remarkable job due to the limited resources.”

The process took so long that the county has been forced to either refund overpayments or adjust the April tax bills downward to compensate people who paid their tax based on inflated assessments.

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Some homeowners, such as Zvia Uziel of Northridge, discovered that they had been slapped with penalties for failing to pay taxes they thought had been deferred. Others, such as Howard and Lee Blatt of Tarzana, obtained deferments of taxes due last year--only to find themselves faced with two years worth of bills, both due at the same time.

“We had some people who called with righteous indignation that the government required them to pay,” said Assistant Treasurer and Tax Collector David J. Collins. “There were people who were very bitter about it. I explained that there’s nothing we can really do.”

“We’re not objecting to paying our taxes,” said Lee Blatt, adding that the couple owe $18,000 for the two years on their home, a small business and two apartment buildings they own. “We’re just saying that the burden was too much for this April, especially since not all the properties are fixed yet.”

Not all of the $55 million in lost taxes will be absorbed by the county, which keeps only 23% of property tax revenues. The rest is doled out to schools, municipalities including Los Angeles and special assessment districts. But the county is responsible for refunds.

Typically, the reduction in taxable value of property is based on the cost of repairs. Property owners submit copies of documents from their insurance companies or bills from contractors.

It is too late to apply for a reduction in value for this tax year, but property owners whose damage is still not repaired can apply to the assessor’s office for a reduction for the 1995-96 tax year.

County officials said the delays and snags were inevitable in such a massive, costly program. So far, according to Townsend, the county has spent $3.4 million examining about 65,000 structures and parcels.

By comparison, the riots of 1992 damaged 694 properties, whose value went down $104 million. The firestorms of 1993 affected 493 properties, reducing their taxable value $101.4 million.

When the earthquake hit, Townsend said, the county was down about 100 appraisers from a peak in the late 1980s of 700, and many were busy working on appeals from 100,000 applicants who wanted their property values lowered because of the poor economy.

Also, he said, some reassessments took longer because property owners had not settled with their insurance companies. Others found new damage after they had applied for reductions.

The county, cash-strapped and facing challenges in raising funds, expects to recoup much of the lost tax revenues from federal and state agencies, officials said.

But County Administrative Officer Sally Reed said that will not happen for several months, leaving the county short as much as $30 million in the interim.

“It does create an additional cash flow problem in a situation where we already have cash problems,” Reed said.

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Ranking Disasters Here is a comparison of the effects of the Northridge earthquake, the 1993 firestorms and the 1992 riots on Los Angeles County property values and tax revenues. *

Dollars *

Reduction in property values. Quake: 5.5 bil. Fire: 101.4 mil. Riots: 104 mil. *

Reduction in property tax revenues. Quake: 55 mil. Fire: 1.01 mil. Riots: 1.04 mil. Source: Los Angeles County Assessor’s Office