Compromise Near on Bill for Collecting School Tax

Two months after Santa Clarita Valley voters approved taxing builders to pay for classrooms, officials say they are nearing a compromise on legislation to enforce collection of the tax.

The bill, sponsored by state Sen. Ed Davis (R-Valencia), would provide the legal mechanism that local authorities need to tax developers who bring new students into the fast-growing area and its already crowded schools.

Voters in the Santa Clarita Valley on June 2 authorized taxing up to $6,300 for each new home built in the Hart, Newhall, Saugus, Castaic and Sulphur Springs school districts.

No Existing Provision

But, because there was no provision under existing state law for school district officials to carry out the voters’ mandate, they asked Davis to sponsor a bill enabling them to do so.

“The attorneys say there is nothing that says they can or they can’t collect the tax,” explained Hunt Braley, an aide to Davis.

For two months, school district officials have collected the tax but placed the money in a special account so that it can be refunded if a lawsuit challenging the election results is successful.

The suit, filed by the California Building Industry Assn. and the Building Industry Assn. of Southern California, charges that the tax is illegal and the election invalid. The suit is scheduled to be heard Aug. 20 in Los Angeles Superior Court.

The powerful builders’ lobby has opposed Davis’ bill. “If the Legislature passes a statute, it could influence the court into thinking the tax valid,” said Don V. Collin, legislative counsel for the California Building Industry Assn.

Compromise Attempted

But Braley said the state senator’s office is negotiating both with the builders’ lobby and school district officials “to see if there are changes that can be made to resolve developers’ objections, as well as to meet the needs of our constituents.”

Davis is willing to negotiate some points, but will stand firm on doing whatever the school district needs to collect the tax, Braley said.

The bill is scheduled to be reconsidered by the Assembly Education Committee on Aug. 17.

Davis’ original bill received unanimous approval from the state Senate, but was rejected by the committee in July because of heavy opposition from developers. The committee now has struck the vote rejecting the bill from the record to give the revised measure another chance after summer recess.

Braley insisted that Davis’ bill will not influence the outcome of the developers’ lawsuit because the state senator avoids using language that validates the tax.

“The school districts did not ask Sen. Davis to carry the bill to impose a tax,” he said. “They asked him to carry the bill to set up a mechanism for collecting it without imposing the tax. That was up to the people. Now it’s up to the court.”

Lawyers for the developers and the school district said they are working with Davis’ staff on compromise language. Neither side wished to discuss the language in detail, but Collin said, “I think we’re getting very close to an agreement.”

Attorney Terry Dixon, who represents four of the school districts, said the schools are attempting to ensure that they will eventually be able to collect their money. To achieve that, Dixon said, school officials are willing to support inserting language so that the builders’ lawsuit will not be negated if the bill is passed.

Even though there is no state law yet to back collection of the tax, Edley Watson, county district engineer in the Santa Clarita Valley said, “We don’t issue the permits without certificates of compliance from the school districts,” demonstrating the tax has been paid.

Not Many Applications

The school districts have collected the tax from only a few people who have applied for building permits, said Jim Bown, an administrator with the William S. Hart Union High School District.

“I tell them up front that the tax may be ruled illegal,” he said. “We’re keeping the money in a special account in case we have to pay it back. So far, people haven’t been wildly happy about paying the tax, but they’ve paid it.”

Since the June 2 election, no developers have come forward to obtain permits for large housing tracts. “That was done before the election,” Bown said.

In the two weeks before June 2, Bown said, he issued 2,245 certificates of compliance to developers seeking building permits.

Bown said the school districts need Davis’ legislation in case some developers simply refuse to pay the tax.

Dixon agreed that school officials cannot confidently collect the tax without state law to back them up.

Moreover, he said, if the money is not collected and the builders’ lawsuit drags on for several years, school officials might be forced to go to new homeowners to collect the tax.

The bill, as now amended, would be incorporated into Section 43040 of the state Education Code, which prescribes a procedure for the collection of a special tax being levied by the Chino Unified School District on developers. The names of the five Santa Clarita Valley school districts simply would be inserted into that statute if the bill becomes law.

Financing Problematic

To underscore their need, school officials in the Santa Clarita Valley point to the problems of school financing throughout the state. There are now school construction projects costing $3 billion waiting to be financed, but only $700 million is available in the state budget to finance them.

Santa Clarita Valley school districts are waiting in line with their requests. But, said Hart Supt. Clyde Smyth, “We may never see any of the money.”

School districts in the Santa Clarita Valley must raise about $300 million to build at least 25 new schools to house a student population expected to double to more than 40,000 during the next 25 years. The overall valley population is expected to increase from its present 110,000 to about 270,000 by 2010.

School officials estimated that the voter-imposed tax, if upheld by the court, will raise $100 million toward the amount needed.