Government Finance and Operations 10/07/2011
SBX1 8 (Committee on Budget and Fiscal Review) – No Position
Earlier this week, Governor Brown vetoed SBX1 8. This bill would have modified the provisions of the budget that eliminated redevelopment agencies unless they provided more money for schools and other interests.
The Governor in his veto message said he thought it unwise to modify legislation that was currently pending review by the Supreme Court. The Court has said it will rule on the redevelopment lawsuits by January 15.
Among other things, SBX1 8 would have given redevelopment agencies greater flexibility to make the required payments and would have strengthened protections for the low- and moderate-housing funds left by redevelopment agencies that are eliminated.
Senior Tax Deferral Program
AB 1090 (Blumenfield) – Support in Concept
Chapter No. 369, Statutes of 2011
AB 1090, by Assembly Member Bob Blumenfield, allows counties, at their option, to implement the County Deferred Property Tax Program for Senior Citizens and Disabled Citizens, allowing qualified property owners to defer their property taxes until the property changes hands. The state eliminated the statewide version of the program in the February 2009 budget agreement.
The state’s Senior Citizen’s Property Tax Postponement Program offered income-eligible seniors and the disabled the opportunity to postpone their property tax payments in exchange for full repayment with interest when their home changes owners. The program had a minimal start-up cost and in most years generated revenue for the state General Fund. Unfortunately, in large part due to the recent recession and housing crisis, the program failed to pay for itself in 2007-08 and 2008-09, making it a target for elimination given the state’s budget crisis.
CSAC, along with county assessors, auditor-controllers, and treasurer-tax collectors, worked with Assembly Member Blumenfield, the State Controller’s Office, and the State Treasurer’s Office to improve the program and ensure it is fully self-funded.
Unfortunately, because bankers raised concerns about the priority lien status of the deferred property taxes, amendments to the bill in May removed those provisions. Counties strongly endorsed the priority lien as a long-standing practice for collecting local taxes and assessments. The tax deferral program authorizes deferral and later payment of property taxes, thus the appropriate placement of the lien is first lien status. However, the final version of the bill does not provide that priority lien for these property taxes, making it less likely that counties will choose to implement this highly desirable program.
Governor Brown signed AB 1090 last Friday, September 30.