New tax act initiative could change city’s annexation processes

Santa Clarita City Hall is located on the 23900 block of Valencia Blvd. File Photo

The Santa Clarita City Council will review information on the state’s Tax Fairness, Transparency and Accountability Act of 2018 initiative at its next council meeting.

The council will discuss at the May 22 meeting the initiative that proposes to amend the State Constitution’s rules for how state and local governments can impose taxes, fees and other changes.

The initiative is still gathering signatures, but if it reaches the requirement it will be on the Nov. 6 general election ballot.

City staff will provide the council information on the potential impacts of the initiative, should it be passed.

The biggest aspect of the initiative would affect Santa Clarita’s process for acquiring land, said Masis Hagobian, an administrative analyst with the city.

“It would have pretty significant impacts on our process for annexations,” he said.

A provision in the proposed measure would impact future annexations and require residents in such unincorporated areas to vote on new local taxes or fees, Hagobian said.

A two-thirds vote by residents would be required to extend a local tax to a new territory. This would require cities to receive two-thirds approval from affected residents prior to applying any existing local tax on any future annexed areas. If this measure were to pass, the city would be prohibited from applying these local fees and taxes on newly annexed territories in lieu of a two-thirds vote of support.

The city currently surveys affected residents prior to an annexation, but there is no requirement for a vote threshold in the annexation process, according to city documents.

Residences in unincorporated areas in the SCV pay most of their utility fees and taxes to Los Angeles County. After an annexation has been completed, county fees are replaced with city fees.

The League of California Cities is encouraging cities to adopt a resolution opposing the Tax Fairness, Transparency and Accountability Act of 2018. The city is hearing about the initiative before it makes any sort of future decision.

The City Council Legislative Committee reviewed the Tax Fairness, Transparency and Accountability Act of 2018 at its May 8 meeting and had requested staff to forward the proposed initiative for review by the City Council without a specific recommendation by the Legislative Committee.

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