Parcel System Isn’t Suited for Flat Tax
Common sense would suggest that before borrowing a chef’s oven, one should consult the chef about any potential surprises. Likewise, before attempting imaginative methods of generating tax or assessment financing based on the assessor’s parcel system, it would be wise to consult the county assessor.
I recently met with a number of folks to explain some of my concerns about the risk of special tax assessments in Ventura County based on a flat rate per parcel rather than on value.
Unintended uses often result in unintended consequences, and any application of a direct per parcel tax assessment is a misuse of the parcel system. Our parcel system was not created for a flat tax; a number of unintended consequences would result.
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The Ventura County assessor’s office has a complex layer of responsibilities legally mandated and organized around appropriate use of our parcel system. This system stems from the responsibility to identify ownership of all property within the county and to facilitate property taxes calculated on an ad valorem (according to value) principle.
Here is a summary of some of the conflicting issues.
* Substantial inequity would occur. Consider a small lakefront lot and house valued at more than $750,000 and compare it to an inferior location lot of similar size but with a house valued at only $80,000. Although the properties are of similar size, with single-family residential use, the market values are tremendously different. A flat fee tax assessment would be unfair.
* Lots split by tax rate area (TRA) boundary lines often have two assessor’s parcel numbers. Because of this jurisdictional boundary line passing through the property, the owner would receive two assessments.
* Mobile home parcels would be significantly impacted by a per parcel tax. Some mobile homes are on the state Housing and Community Development license fee system but others are on local property tax rolls. Two similar mobile homes might not get the same tax treatment.
* One farm might consist of numerous parcels, again resulting in numerous assessments for one economic unit.
* Last year, 3,768 low-value parcels were exempted from taxation. A flat-tax assessment could send the owners a bill that would exceed the original assessment.
* Property owners in unusually subdivided neighborhoods, such as Box Canyon, can own a dozen small assessor’s parcels that comprise only a few legal parcels. They could end up receiving a dozen special assessments.
* Small sliver parcels often result from a variety of land divisions, such as roadway eminent domain activity or lot line adjustments. Also these parcels can be in condo association landscape medians or buffer strips that have little economic value.
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This issue might best be addressed by considering a small, fractionally appropriate tax rate, applied against the value of the property. This would be similar to what we have with school bonds and the factor applied under Proposition 13. This allows us to maintain the fairness of the assessor’s parcel system relative to the appropriate balance in assessment amounts.
Another possible way to finance special districts would be the sales tax method. The Sonoma County Agriculture Preservation and Open Space District was created in 1990, based on a one-quarter percent sales tax to generate revenue for land preservation.
Sonoma County is now generating more than $12 million per year, and with 10 years’ experience has more than $40 million dollars in the bank on top of purchases completed.
Ventura County has a substantially larger retail sales total than Sonoma. Even a one-eighth percent sales tax could generate approximately $9 million a year.
As a matter of fairness, alternatives should be given serious consideration over a per parcel tax assessment.
The assessor’s parcel system functions very well when used for property taxes computed on a fractional rate of value and I would like to protect taxpayers from an unfair method. To use it otherwise would be a recipe for trouble with bittersweet results.