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June 23, 2021

Official: Governor forgives county’s tax debt

The governor has signed legislation to forgive San Benito County of millions of dollars in tax debt, according to a county official.
Gov. Jerry Brown’s budget draft released in May included a provision to forgive San Benito County $3.4 million owed for back taxes, according to the local assemblyman’s office. Assemblyman Luis Alejo, D-Salinas, and State Sen. Anthony Cannella authored the bill, which they have pushed in prior sessions as well.
At Tuesday’s county board meeting, County Administrative Officer Ray Espinosa announced the governor had just signed a bill forgiving the Educational Revenue Augmentation Fund debt.
According to an announcement from Alejo’s office in May:
Today, Governor Jerry Brown’s May Revise codified Assembly Bill 440, authored by Assemblymember Luis Alejo (D-Salinas). Assembly Bill 440 would have required the state to relieve San Benito County from reimbursing the state $3.4 million.  
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 methodology recommended by the State Controller’s Office.
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, the small error that began in 1997 grew to an unmanageable burden by the time it was discovered in 2005.
This was the fourth attempt by Alejo to relieve San Benito County’s ERAF debt.  AB 1676 (Alejo, 2012) died in the Senate Governance and Finance Committee, and in 2013 and 2014, he worked unsuccessfully to include the debt forgiveness language in the budget trailer bills.
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