Calabasas : Temporary Reprieve Granted on Taxes

Agoura Hills and Calabasas have received a temporary reprieve from a state Supreme Court ruling that may eventually force the two cities to return to taxpayers millions of dollars collected over the past three years.

The court in September upheld a 1986 state ballot measure--Proposition 62--that requires voter approval of general and special taxes. Calabasas has collected $1.7 million annually in utility taxes without voter approval since it incorporated in 1992; Agoura Hills has collected $1.4 million from a utility tax implemented more than a year ago. Countless cities throughout the state face similar situations.

The ruling was to have gone into effect at the end of October, but the court has agreed to postpone the effective date until Dec. 27, Agoura Hills City Atty. Greg Stepanicich said. In the meantime, he said, the court is considering the Santa Clara County Local Transportation Authority’s petition for a rehearing.

Voters in that county approved a sales tax increase in 1992 to pay for transportation improvements. But the county’s auditor/controller refused to implement it, saying he feared it was illegal. An appeals court ruled that the tax was invalid under Proposition 13, and the Supreme Court essentially upheld that argument in its September ruling on Proposition 62.

Cities, meanwhile, are hoping that if the court decides to rehear the matter, it will clarify whether the ruling is retroactive to 1986. But Stepanicich and other legal experts say that isn’t likely to happen, because the court would limit its scope to the Santa Clara County case, in which the sales tax was never collected.

The court may decide to make the ruling retroactive only to September, legal experts say, in which case Calabasas and Agoura Hills would be able to keep the millions collected up until that time. But Agoura Hills officials say they are taking no chances, and that they have put $1.4 million in escrow in case the ruling is made retroactive to 1986.