Property Tax Is a Rare Bright Spot for State Income

Long blamed for not doing enough to fund schools, California homeowners are one of the few revenue sources the state can count on in this lean year, with property taxes -- due in part today -- projected to bring California and its localities at least 7% more than last year.

In some parts of Southern California, where the housing market has been robust, county tax collectors expect to reap more than the state average.

While revenues from taxes on income, capital gains, sales and a host of other goods and services are projected to be sharply down or flat, property taxes are “the one area that’s sustaining growth,” said Dan Goodwin, assessor in Ventura County, where the tax roll is nearly 10% larger than last year.

As California officials grapple with a shortfall topping $21 billion, taxes on real estate are “keeping it from being a disaster,” he said.

Today is the deadline for property owners to pay the first half of their 2002-2003 taxes. The second installment is due April 10.

Statewide, property taxes are projected to top $29 billion this year, based on a 7.3% increase in the assessed values on which the taxes are largely calculated, according to the State Board of Equalization.

Property taxes amount to 1% of a property’s value in the year it was purchased. Added in locally are service charges from agencies and any debts levied to pay for bonds.

Under Proposition 13, California’s landmark taxpayer reform passed in 1978, unless a property is sold, transferred or significantly upgraded, the owner’s tax bill can increase no more than 2% a year. There are various quirks in the tax law, such as an allowance for homeowners over 55 to retain their older, lower tax assessment if they sell their home and move into a less expensive one.

Because housing prices have far outpaced the cap on taxes, it isn’t just older, longtime owners who have benefited from Proposition 13.

“If you bought a house five years ago, you’re benefiting dramatically,” said Jim Dodd, Ventura County’s deputy assessor.

Before Proposition 13, localities could change tax rates from year to year, based on their budgetary needs. Just as it was lauded for making property tax bills more predictable, Proposition 13 has been criticized for benefiting land-rich Californians at the expense of public school students, who stand to benefit most from property tax collections.

On Monday, taxpayers rushed to postmark their checks, pay by computer or phone, or line up at county tax collectors’ counters throughout the region.

To sweeten the prospect of paying taxes, Ventura County’s treasurer-tax collector, Larry Matheney, handed out Hershey’s chocolates to property owners as they made out their checks to him.

The strong housing market in Ventura County has made for a tax roll $66 million richer than last year -- it’s now $746 million.

In Orange County, as in the rest of the state, the tax collector warned that residents who miss today’s deadline will be charged a hefty fee.

“If you pay late -- by even one day -- you are assessed a 10% late-payment penalty. It’s very hard to get that waived, almost impossible,” Treasurer-Tax Collector John M.W. Moorlach said, adding, “I take no joy in collecting that.”

Moorlach’s office issued 781,493 bills this year, calling for $2.9 billion in property taxes. That’s more than 9% more money than in the last fiscal year, which ended June 30.

“That shows the growth in our county,” Moorlach said. The rise stems from “increased property values and 10,000 new parcels -- new homes and other parcels subdivided from existing larger parcels.”

Los Angeles County’s property assessment roll grew by more than 6% for the fourth straight year, by $39.8 billion, county Assessor Rick Auerbach said. During most of the 1990s, he said, 3% increases were more common. The county issued $7.6 billion in tax bills this year.

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Times staff writers Seema Mehta and Kenneth Reich contributed to this report.