Property Tax Bill That Would Benefit Los Altos Hills Is Introduced in Legislature

Editor's Note: This article was written for Saratoga Patch as part of a San Jose State University journalism class assignment. The writer welcomes your feedback and comments.

Proposition 13—officially the People's Initiative to Limit Property Taxation proposition—passed on June 6, 1978.

It reduced property taxes back to their 1975 levels and was a boon to seniors, many of whom had been exeriencing financial hardship with an ever-rising tax rate. It also created a significant problem for cities that at that time had no or low property tax rates (no/low tax cities), Saratoga, Monte Sereno, Los Altos Hills and Cupertino, among them.

Prop. 13 made it harder for these communities to pay for programs related to infrastructure, planning and many other basic needs.

Although Section 98 of the California Revenue and Taxation code was passed later to fix this, providing 7 percent of the property taxes collected by the state to these no/low tax cities, four cities in Santa Clara County found they could not benefit from it. 

Due to some political wrangling in the state Senate, the four cities—Saratoga, Monte Sereno, Los Altos Hills and Cupertino—had their percentage lowered to just 55 percent of that 7 percent collected by the state. 

Earlier in the last decade, this 55 percent limit was repealed by Assembly Bill 117, but not totally. As a result, about $2 million in property taxes have not been returned to these cities each year. For Los Altos Hills, Beall's office has said, that is about $172,000 each year.

The four cities have jointly lobbied for years and several bills have been introduced into the Assembly by  Jim Beall (D-San Jose), who represented District 24 until he was elected to the state Senate in November. Beall has continued the fight by introducing the Property Tax Allocation Bill, Senate Bill 629.

The recent recession and state budget issues have limited Saratoga's ability to provide services for its constituents, according to Saratoga Councilman Chuck Page.  Fortunately, Saratoga has successfully applied for grants to provide for basic services, including park development and road repairs, Page said.

The upturn in the economy and resulting benefit to state revenues, and the passage of Gov. Jerry Brown's Proposition 30 last fall have given supporters renewed hope that SB 629 has a chance of passing and true equity will finally be achieved.

Before it becomes law, SB 629 must go through the Senate committees and faces a full vote by the state Senate. After that, the bill will go through a similar process in the Assembly. After passage in the Assembly, Saratoga and the other three Santa Clara County cities could finally receive the percentage of property taxes that they are entitled to with Brown's signature.