Jonathan Kraut | What’s the Story Behind the Assessments?

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It has become a trend in government over the years to assign special assessments, i.e. taxes for a specific purpose, such as to allocate levies for precise government services and activities. Aside from sales tax, income tax and general property tax, there are a myriad of other assessments that we are funding but are often unseen by many.

We have numerous bond measures approved by voters that supposedly fund something specific, like for education, water conservation and delivery upgrades, and infrastructure. Property owners also pay special taxes for specific local services. 

On my tax bill these are called “direct assessments.” These costs of course are not just paid by property owners but are passed down in the form of higher rent and charges to others in many cases.

My property tax bill lists the following “direct assessments”: flood control, consolidated sewer, county park, vector control, Measure A, SCV transit, Santa Clarita lighting district, open space, storm water utility, medians, trauma/emergency services, and county fire. These on my bill equal about $900 a year.

All these assessment topics seem necessary and worthy.

Also on my tax bill are “voter indebtedness” items such as special water, community college, high schools and elementary schools. These items add about another $950 to my annual tax obligation. 

The 2010 census listed about 60,000 single residential properties in Santa Clarita. Let’s say that in the nine years since there are now about 65,000 homes. If we estimate that my “voted indebtedness” and “direct assessments” are typical amounts, this means that over $120 million is raised locally each year.

While these taxes do not include state bonds and state taxes, we are still talking about a ton of money collected annually.

Late last year I received a city notice recommending voting to approve a reduction in the maximum rate for special landscaping and lighting zone services in my district. This letter and two subsequent voter ballots promoted that voting “yes” to lower the cap amount would save me $200 a year. The problem is that my current bill says I only pay $81.71 a year and not the $1,030.59 listed on the ballot.

Fearing something nefarious, I spoke with a city representative who reassured me that lowering the cap had no real impact on my bill and that the decrease in the cap only affected the potential amount assessed, not the actual amount assessed. 

This, however, raises for me the big question: Then why reduce a cap that does not apply or has no meaning?

For whatever reason, the City Council in early January scrubbed the vote on the landscape and lighting cap rates and I guess we don’t have to worry about it for now — except that I can sense there is more to this City Council intent to seek voter approval by introducing this ballot than meets the eye.

While lowering the cap amount on a special assessment fee seems commendable, the bigger question is what happens to the monies once collected. I want to believe that taxes raised for a specific purpose are fully allocated for that purpose and are not diverted in any way.

If government has one specific duty that surpasses all others, it is to use and spend taxes on the behalf of the community with excessive care and diligence. 

But if we examine how the Los Angeles Department of Water and Power overcharges for services and then passes the surplus in the millions every year back to the city of Los Angeles general fund, we should be skeptical. LADWP, for example, diverted $241 million in overpayments back to L.A. City in 2017 instead of lowering rates or refunding customers. 

I reached out to the city attorney’s office to ask if funds collected for a special assessment fund can be used for anything other than for those specific services. I have not yet heard back, but from my conversations with city representatives and community leaders, it would seem that special assessments are adjusted up or down appropriately and are only prescribed to fund very narrowly defined activities. Further, it is felt that these funds cannot be raided or diverted for other purposes.

What I hope to discover is that taxes collected for valuable efforts, such as SCV open space preservation, vector control, the sustaining county park district, etc., are fully devoted to, and only to the services for which are described on our tax bills. It would be a shame and disappointing to learn otherwise.

I will update our Signal readers on what I learn.

Jonathan Kraut directs a private investigations firm, is the CFO private security firm, is the COO of an Acting Conservatory, a published author, and Democratic Party activist. His column reflects his own views and not necessarily those of The Signal or of other organization. “Democratic Voices” appears Tuesdays.    

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