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California

Beutner’s changes to ballot language spark debate over parcel tax for L.A. schools

Aug. 6, 2009:: Old 60s era parking structure still used next to Disney Hall in downtown Los Angeles.
To tax or not to tax? Parking structures like this entered center stage in a debate over whether the L.A. school district followed the law in putting a property tax on the ballot.
(Scott Harrison / Los Angeles Times)

A dispute is roiling over a change to the ballot language of Measure EE, which would raise an estimated $500 million a year for Los Angeles public schools if approved by voters next month.

The funding infusion would provide major relief to the financially challenged L.A. Unified School District, but it would come at the cost of a substantial new obligation for local property owners.

The ballot language is the latest battlefront between business interests that oppose the tax and those who favor it, including school district officials, labor groups and others.

The proceeds of Measure EE would help both traditional public schools and privately operated charter schools in L.A. Unified. It will go before voters who live within the boundaries of the school system on June 4 and must win two-thirds approval. It is called a “parcel tax,” because the tax is applied in a uniform way per parcel and not based on the value of the property. Each eligible square foot of a parcel would be taxed at 16 cents a year for 12 years.

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The school board voted unanimously on Feb. 28 to put the measure on the ballot. And district staff assured board members at the time that there would be no changes to wording, with the exception of correcting a misspelling or an error in grammar or syntax. To do otherwise would be illegal, board members were told.

But then in a March 11 letter to a county election official, L.A. schools Supt. Austin Beutner requested a change to the description of what would be taxed.

This description is crucial because it affects how much revenue the school system collects and how much money each property owner must pay for “improved building square footage.”

If this revision amounts to a change in the district’s taxing authority, the measure could face a legal challenge, based on the district’s own earlier legal analysis.

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The original language, as approved by the Board of Education, defines what can be taxed as “habitable main square footage as measured by the Los Angeles County Assessor and as maintained in the Assessor’s electronic reports.”

But it is the revised definition submitted by Beutner that appears on the ballot: “the square footage of all buildings or structures erected on or affixed to the land.”

In a Friday interview, county Assessor Jeffrey Prang said the district requested a change because of apparent uncertainties with the original language, which referred to “habitable” space.

“Habitable is not a term we use in assessment practices,” Prang said. “It would have to be clarified. In the context of how we maintain assessment records currently, we would ask the question: Does habitable mean for the use of habitation or a place of business?”

Had the measure become law with the original language, Prang said, his office would have asked the district about its intent but also would have obtained an opinion from the county’s legal staff.

As for the revised version: “My read on that is it says ‘all structures’ and that is pretty unambiguous.”

Beutner requested the change before the legal deadline, so that’s not a problem. The issue is what would be taxed and whether Beutner acted on proper authority.

District officials insisted Thursday night that Beutner had delegated powers to act on behalf of the board and, besides, the change was not meaningful — it only clarified what the school system had intended to do all along.

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But that last point is in dispute because of earlier statements by district staff. In a Feb. 26 staff presentation, for example, senior Beutner aide Pedro Salcido told board members that garages would not be taxed.

“As you look at the ballot language… when you look at the square footage we’re looking at improved property on the parcel,” Salcido said in video footage reviewed by The Times. “It exempts garages, pool houses, cabanas, pools from that measurement. So it’s primarily the habitable, or the area that is being utilized on the property.”

In retrospect, Salcido’s explanation was ambiguous. Did he mean only that a parking garage at a residence would be exempt or did he also mean commercial or office parking structures?

Parking structures are not commonly considered to meet the definition of habitable, said assistant county assessor George Renkei.

When this issue came up in March, the assessor’s office forwarded language from an earlier parcel tax for LAUSD to review as a potential model, Prang said. L.A. Unified used this model with one especially notable change. The earlier measure exempted commercial parking structures. L.A. Unified, however, deleted that exemption.

The difference could be key, according to some business leaders. A complex or building with a million square feet of office space already would owe $160,000 a year. A parking structure of similar size would double that bill.

As for residences, the owner of a 1,500-square-foot home would be responsible for an annual property tax increase of $240. Under the revised language, if that property owner has a 300-square-foot garage, there could be an additional annual fee of $48. Other taxable structures could include storage sheds.

Although school board members did not approve the change, they were alerted to it, in a March 11 email from Amanda Wherritt, the district’s program and policy development advisor. She described the change as “a minor technical revision.”

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A legal analysis prepared for the business group BizFed, which opposes the tax, reached a sharply different conclusion.

“LAUSD did NOT have any public meeting discussing or approving the change in language of the tax measure,” stated the analysis, which was provided to The Times. “LAUSD has NOT provided an updated projection of the revenue resulting from the extension of the tax.”

Legally required “public disclosures” did not take place,” according to the analysis.

BizFed is considering what legal recourse might be available, said Tracy Hernandez, the group’s founding chief executive officer.

Although district officials defended their actions, staffers were scrambling late in the week to consider possible responses — to manage both the legal and public relations fallout.

“On Tuesday, we’re going to put something before the school board to put some clarity on this,” said district General Counsel David Holmquist. “Our goal is to make sure that there is uniformity. The tax has to be applied uniformly.”

howard.blume@latimes.com

@howardblume


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