Alejo, Cannella aim to relieve county of $3.5M owed to state

30th District Assemmbly Member Luis Alejo speaks in 2014 during the South Valley Legislative Summit at the Hilton Garden Inn.

Assemblyman Luis Alejo and State Sen. Anthony Cannella are reintroducing a previously defeated bill to relieve the county of $3.5 million in owed property taxes.
Alejo and Cannella are once again vying to get San Benito County off the hook for the tax money owed due to miscalculations over a decade period.
According to the announcement from Alejo:
Assembly Member Luis A. Alejo (D-Salinas) and Senator Anthony Cannella introduced AB 440, which deems correct an accidental longstanding property tax allocation error that has cast a shadow over San Benito County for almost two decades.   In effect, the bill will alleviate San Benito County from reimbursing the state $3.5 million.
“The fiscal consequences of forcing San Benito County to repay this debt would be disastrous to the County’s already dire fiscal condition,” says Alejo.  “The County is in no position to pay this large sum of money and should not be forced to do so.  The reporting error and the eight year period during which it went unnoticed is not wholly the counties fault, and the County should not suffer alone.”
The State Controller’s audits conducted in 2005 and 2009 indicated that San Benito County underfunded the Educational Revenue Augmentation Fund (ERAF) for the fiscal years between 1993 and 2001.  The County disagreed with the finding, but agreed to move forward using the recommended State Controller’s Office methodology.
While trying to address the audit’s findings, a subsequent error was made due to the use of an incorrect base year.  This new error, which unknowingly occurred in 1997, was not detected until a subsequent audit was completed in 2005.  Unfortunately for the County, the small error that began in 1997 grew to an unmanageable burden by the time it was discovered in 2005.
San Benito County was not alone in making this type of error.  In Fact, two legislative efforts occurred between 2001 and 2004 to address these types of ERAF errors for other counties, but the timing of the clean-up legislation and the discovery of the San Benito error disqualified the County from any of the relief.  In fact, San Benito County is the only county remaining with an outstanding ERAF issue.
“San Benito is the last county in the state to still be burdened with ERAF debt,” states Alejo.  “It is only fair that we give San Benito the same forgiveness as other counties in the state, especially in light of the fact that San Benito has fixed its errors since 2005.  This debt forgiveness is long overdue.”
“San Benito County has been forced to accept a $3.4 million common mistake made unbeknownst to them — a mistake other counties have made and have been granted relief. And while we continue to recover from a devastating recession, we must provide the means and relief necessary to ensure our communities remain strong and continue their path to economic recovery,” said Cannella.  “AB 440 corrects the mistake, allowing San Benito County to get its ERAF back on track.”
This bill will be eligible to be heard in a California State Assembly policy committee after 30 days of being in print.

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