- by single-family home
- by acre
- by apartment unit
- by square foot
A parcel tax is now a common method in California for a levying a "qualified special tax" imposed by a local unit of government, such as a city, county, school district or special district. Special taxes are permitted by the California Constitution, requiring approval at an election of at least 2/3rds of those voting on the measure.
Parcel taxes can be used for any type of spending--construction costs, employee salaries and other projects or spending needs.
Elections to vote on parcel tax measures must take place on what are known as "established election dates." In even-numbered years, these are in March, April and November. In odd-numbered years, these are in March, June and November. However, if the election will be held by mail only, the election dates can also be set in May or August (odd or even years) and June (even-numbered years).
Notice that a parcel tax election will occur must be given at least 90 days in advance of the date of the election.
School parcel taxes
- See also: Parcel tax elections in California
There are 1,042 public school districts in California and since 1983, about 245 of them have adopted a parcel tax.
In California, the state government budget provides local school districts with approximately 75% of their budget. The rest comes from local taxes. The state government gives more money to school districts that get less revenue from local property taxes based on a formula that is intended to equalize per-pupil spending. However, the formula used by the state does not take into account whether or not a school district has a parcel tax, which means that in some districts (those with parcel taxes), per pupil spending is higher than in those districts without a parcel tax.
Senior citizen exemption
Parcel tax measures can be written so as to exempt senior citizens (those over 65) from having to pay the special tax. This increases the odds that a parcel tax measure will pass, since senior citizens can vote for it, without having to pay it. In June 2008, when the Novato Measure A parcel tax was on the ballot, "school officials went door-to-door ... to let seniors know about the exemption."
The so-called "senior exemption" can be written so that it only applies to those who live on the property. What this means is that if a senior citizen owns a property that the parcel tax applies to, but does not live on that parcel, that senior citizen would still have to pay the tax.
Generally, senior citizens must apply for the exemption. Senior citizens in Contra Costa County told a reporter in October 2009 that they were being billed for parcel taxes even though they had applied for the exemption. Kathleen Clow, chief business official for the Ross Valley School District in the county, said, "Sometimes something somewhere happens. The code doesn't get in there. The form gets left blank. We don't know if a person is legitimately exempt. There's a lot of paperwork to process. And from the district's perspective, we want to collect every possible revenue, so we prefer to err on the side of the parcel tax."
If a senior citizen is unaware of the exemption and does not ask for it, that person is not allowed to receive a retroactive reimbursement of the tax.
Edward Briggs, a retired attorney in San Anselmo, said that the procedure to apply for the exemption is complicated and time-consuming. "You have to get the form, and then once you sign it they demand a copy of your license. Then because my license says my address is a P.O. box, I had to get my utility bill. They're making people jump through hoops, even when we're qualified for the exemption." He also said, "It's clear that if you're over 65 and your property is your principal place of residence, you're entitled to an exemption. But these folks are making it as difficult as they can (to get the exemption) because they want the money. If that's the way it is, it makes me not want to vote for any school tax."
Exemptions can take up to 16 weeks to process.
Criticisms made about parcel taxes include:
- "Parcel taxes increase the educational gap between rich and poor. San Marino will be able to keep its arts, advanced placement courses and extracurricular activities. San Pablo, one of the state's poorest districts, will never enact such a tax, and students there will suffer."
- In districts with parcel taxes, the tax is the same for inexpensive parcels owned by low-income residents as it is for extremely expensive pieces of land owned by very wealthy individuals and corporations: "LAUSD's proposal will place a $100 tax on a small home in Pacoima and a $100 tax on the tallest high rise in downtown L.A."
Joe Simitian, a Democratic state senator, believes that it should only take a 55% vote to pass a parcel tax measure, rather than a two-thirds majority vote. To that end, he proposed California Senate Constitutional Amendment 5 to bring about that change. To get SCA 5 on the ballot would require a 2/3rds vote of the members of both chambers of the California State Legislature.
It is not uncommon for school districts or city and county governments to hire a public relations consultant to help them plan how to get a parcel tax measure passed. In November 2009, Desert Hot Springs hired the Lew Edwards Group at a cost of $120,000 to devise "a strategic plan and public outreach plan" for a possible parcel tax campaign.
According to California's Franchise Tax Board, parcel tax payments are not deductible against federal and state income tax liabilities.
To be deductible, a property tax must be a percentage of a home's assessed value. Since parcel taxes are not based on the value of a home, they are therefore not deductible, according to the FTB.
According to the agency in November 2011, most homeowners throughout the state do deduct their entire property tax bill from their federal and state income for income tax calculation purposes, including the part of their property tax bill that is owed because of parcel taxes, which are non-deductible. The FTB launched a public awareness campaign to inform California property taxpayers about the non-deductibility of parcel tax payments.
- Wall Street Journal, "California Schools' Tough Choices," June 17, 2009
- Contra Costa Times, "Some seniors find tax exemptions hard to come by," October 17, 2009
- Daily News, "Aid schools by hiking taxes on those who can afford it," February 18, 2010
- Mercury News, "State budget deal should include parcel tax reform," July 13, 2009
- Desert Sun, "Desert Hot Springs to fork up $120K to outreach consultant," November 19, 2009 (dead link)
- San Francisco Chronicle, "Some property tax charges not deductible," November 24, 2011
- Franchise Tax Board, "Understanding the Real Estate Tax Deduction"