A Property Tax Refund May Be Yours

“Proposition 8 values are temporary,” claims Orange County’s assessor, Webster J. Guillory, with great conviction. Wrong! In November, a court declared that Guillory’s assessment “recapture method” violates Propositions 13 and 8. “Recapture method” refers to the assessor’s practice of increasing assessments more than 2% in one year after a decline in value, though the property wasn’t newly constructed and didn’t change ownership.

“Temporary” isn’t in Propositions 13 or 8. In January 1979, a legislative task force, comprising assessors and other bureaucrats, issued a report on implementing Propositions 13 and 8. Ignoring the California Constitution’s plain language, that task force thought that a decline in value should be temporary.

So began California taxpayers’ odyssey that saw assessments jump lately as much as 100% in one year. In 1998, my family challenged the assessor before the Assessment Appeals Board. Guillory lost at the board, and we recovered $100.55. The county then sued my family. Two years later, the county lost again.

The county refuses to admit defeat, yet it won’t face the merits of this lawsuit publicly in the press or even on the county assessor’s Web site, www.oc.ca.gov/assessor. There you’ll find thousands of words about the “2% Case” but nothing from California’s Constitution.

Instead, the county shifts the focus from the ruling on California’s Constitution (the real issue), to what it might cost the government to obey the law. I’m well aware of California’s current fiscal crisis. But exactly when a cost standard to measure governmental misconduct displaced the rule of law escaped my attention.

The question is: 2(b) or not 2(b)? In 1978, Proposition 13 revolutionized California property taxation. The pending class-action lawsuit centers on Section 2(b), a single sentence in the 1978 landmark law. The 58 words of 2(b) remain unchanged since November 1978, when Proposition 8 (the initiative that clarified the original intent of Proposition 13 to allow declines in value) passed by a 78% margin.

The essential words in 2(b):

“The full cash value base may reflect from year to year the inflationary rate not to exceed 2% for any given year ... or may be reduced to reflect substantial damage, destruction or other factors causing a decline in value.”

Ask yourself two questions:

1) May the full cash value base be reduced?

2) If it’s reduced, may the full cash value base be increased more than 2% per year?

When you answer yes to the first question and no to the second, you agree with the judge. It’s that simple.

File a refund claim. Sixty-three percent of Orange County’s 810,000 total parcels are single-family residences. Orange County’s treasurer-tax collector says that nearly half of property taxpayers here (roughly 405,000 countywide) are likely victims of the unconstitutional recapturing method. You may obtain refund claim forms and more information online at www.propertytaxrefunds.biz.

Download a claim-for-refund form and submit it.