State Controller Says Mistake Will Cost County $7 Million

As Ventura County supervisors decide who should replace retiring Auditor-Controller Tom Mahon, his office is once again embroiled in controversy.

Due to a miscalculation by the auditor’s office several years ago, the county now owes the state $7 million, according to an audit recently issued by the California controller’s office.

Assistant Auditor Christine Cohen, who is being considered as Mahon’s replacement, said Monday that the state’s claim is bogus and the county is appealing the audit.

“We’re fighting it,” she said.

The debate centers on a controversial 1992 law that requires local governments every year to shift millions of extra property tax dollars to public schools in order to help relieve the state’s burden. At the time the law was passed, the state was in the grip of a financial crisis.

In 1994, the state agreed to help counties with a one-time credit to offset the loss in property tax revenues. The credit was based on the fiscal year ending June 30, 1994.

But in a recently completed audit, the state controller’s office found that Ventura County based its credit on a calculation that ended in mid-April 1994. This resulted in the state overcompensating the county for three additional months.

Mahon, in a written response to the state, defended the timetable used by the county. But on Monday he declined comment on the matter, referring all questions to Cohen.

Officials with the state controller’s office said Ventura County was not the only local government to make this mistake in 1994. There were at least two others, including Santa Barbara County.

Board of Supervisors Chairwoman Kathy Long said the accounting issue is so technical in nature that she and elected officials have yet to fully grasp the details. But she is supporting the auditor’s appeal.

She said, in general, she distrusts a state system that has been unfairly draining counties of their tax revenue. This year alone, the county has lost $54 million because of the property tax shift, and altogether an estimated $353 million since the 1992-93 fiscal year.

“I’m not going to accept their word for it, until we get a real chance to look at the analysis of our legal counsel and the auditor’s office,” Long said of the state’s findings. The state has “already taken money out of both pockets and now they’re searching for a third.”

Chief Administrative Officer Harry Hufford, addressing the county’s having to pay, said, “It’s definitely a negative impact, but probably can be managed. It will be managed.”