Around 13,000 properties in San Benito County that fall under
the Prop. 13 designation
– which restricts the growth in value tied to tax payments
owners make each year – might see a decrease in valuation for the
first time since the measure passed more than 30 years ago.
HOLLISTER
Around 13,000 properties in San Benito County that fall under the Prop. 13 designation – which restricts the growth in value tied to tax payments owners make each year – might see a decrease in valuation for the first time since the measure passed more than 30 years ago.
If the Consumer Price Index decreases this year – it is teetering between no growth or a slight decline – that would be the case since the Prop. 13 multiplier is tied to the CPI, the State Board of Equalization warned local assessors this week. On one hand, it would result in tax savings for a large majority of property owners here. On the other, county officials likely would have an additional shortfall to offset in the 2010-11 fiscal year, when the 2009 CPI would take effect.
Since the proposition passed in 1978, it has restricted the valuation increase for longtime property owners to a maximum of 2 percent annually, depending on what the CPI has done. About 13,000 properties in San Benito County qualify, Assessor Tom Slavich noted. Another 6,000 or so properties fall under Prop. 8, which bases values on traditional assessments. And about 2,300 qualify for the Williamson Act, which limits tax assessments to preserve agricultural land.
Slavich noted how since 1978, there have been just four occurrences when the CPI indicator was less than a 2 percent hike. While the maximum increase is 2 percent, there is no limit for the decrease in CPI that applies to the Prop. 13 properties.
“This time, the index is very close to zero,” he said. “Right now, they’re looking that it could be a negative, but the year’s not over yet.”
The CPI index runs from October to October each year, so officials throughout the state won’t know the precise result for another month. It could make an already difficult situation for county officials worse, considering prior assessment cutbacks due to the real estate market’s decline.
Assistant County Administrative Officer Richard Inman said the impact could be “significant” but he did not have figures readily available.
“We’ve always had a positive growth in property tax revenue, and now we don’t or it’s minimal,” he said.
