Tax Break for Some Seniors OKd

Hoping to boost a stagnant economy, the Ventura County Board of Supervisors approved Tuesday a new law that allows senior citizens who buy houses locally to retain the low property taxes they had on homes in other counties.

The ordinance, which goes into effect May 4, is expected to spur business activity by luring about 200 elderly home buyers a year from crowded areas such as Los Angeles and Orange counties.

But it will cost the county about $387,000 a year in lost taxes. And that prompted a split among supervisors, who approved the ordinance 3 to 2.

“I think this is important because business is hurting and I think this can stimulate it in a small way,” Supervisor Maggie Erickson Kildee, who sponsored the measure, said in an interview.

The ordinance will not only help the real estate industry but also assist businesses such as landscape companies and home furnishing shops, she said. “It’s a step of good faith by county government, which is trying to work in partnership with businesses,” Erickson Kildee said.

But Supervisor John K. Flynn, who voted for the measure when it was tentatively approved last month, joined Supervisor Susan K. Lacey in opposing it this time.

“When you consider the infrastructure the people of Ventura County have put in--the schools, the water systems, the roads--to give people from outside passage into the county without helping to pay for any of that seems to be inequitable,” Flynn said. “And it’s totally unfair to young people.”

Lacey has said she opposed the measure because it is a tax give-away in a time when the county’s budget has been cut regularly.

The supervisors implemented last month a 2% across-the-board budget cut to make up for a projected $7-million deficit over the next 17 months. About 10% in cuts have been made since January, 1991.

Of the estimated $387,000 annual loss of countywide taxes resulting from the new ordinance, the three sectors of cities, schools and county government each will suffer a loss of about $129,000, according to County Assessor R.J. Sanford.

The same proposal was rejected by the Board of Supervisors in 1989 as too costly and unneeded, because houses were then selling quickly in a superheated market.

Forty-six of California’s 58 counties have rejected the same tax break for senior citizens because of tight budgets, county Chief Administrator Richard Wittenberg has said.

Only three rural counties--Modoc, Inyo and Kern--have approved the transfers. The nine urban counties that allow them are Los Angeles, Orange, San Diego, Riverside, Alameda, Contra Costa, Marin, San Mateo and Santa Clara.

The proposed ordinance would allow new residents who are over 55 to transfer from other counties the low tax rates that were locked in by Proposition 13.

That landmark 1978 initiative reduced the taxable values of real estate to 1975 levels and allowed the values to be increased by just 2% a year unless the property was sold.

The result in Ventura County is that 21% of homeowners pay taxes on houses still valued at about $60,000, Sanford said. The current median value of homes is about $235,000.

Flynn noted that the ordinance could be voided in June when the U.S. Supreme Court is expected to rule on the overall constitutionality of Proposition 13.

Because inter-county transfers of tax rates were first allowed by state initiative in 1988, Erickson Kildee said she has received many inquiries from Los Angeles County residents wanting to move to Ventura County.

Sanford said he favors the transfers not only because they were approved by more than 70% of voters statewide, but also because the senior citizens they bring to the county will have money to spend and require few government services.

In addition, the taxes lost to the transfers would be less than 1/1,000th of the county’s $450-million tax base, he said.

Under a 1986 initiative, senior citizens were allowed to move within each of the 58 counties and still retain their tax rate if they bought a dwelling of equal or lesser value. The same standard would now be used for inter-county transfers into Ventura County.