City’s appeal of taxpayer group victory to be heard

Paul Clinton

A state appeals panel has placed the city’s challenge of a taxpayer

group’s legal victory on its October calendar.

A specific date has not yet been set for the appeal, but both sides

have begun filing written arguments in the ongoing case.

The Howard Jarvis Taxpayers Assn., the statewide group that sponsored

1978’s landmark initiative Prop. 13, sued Huntington Beach in December

1999 to stop a city practice of overriding that measure’s 1% cap on

property tax.

The city charges an additional 0.5% “override” tax to pay for benefits

for its employees. That revenue stream can amount to as much as $9

million a year, city records show.

After losing the first round of the case, City Atty. Gail Hutton

appealed to a higher court. Last June, a superior court judge ruled that

the override tax was a violation of state law.

Under the terms of Prop. 13, cities collecting property tax for a

“preexisting debt” could exceed the 1% cap. City attorneys argued that

the retirement account met this criteria.

They cite two citywide initiatives, which were passed in 1966 and

1978, that they say give the city the authority to levy additional

property tax to pay for the benefits.

Property owners in the city have paid the additional tax for about 40

years.

Since homeowners have always paid the tax, Deputy City Atty. Scott

Field contends they should continue to pay it.

“We can only use the tax to pay for those programs that the city was

offering as of July 1978 [when Prop. 13 became law],” Field said.

If the city ultimately loses the case, residents who have owned

property in the city since 1999 would be eligible for a refund of the

override tax. To receive the rebate, residents are required to file a

claim with the City Clerk’s office.

“When we win, the city has pledged to honor these claims,” said Tim

Bittle, the association’s senior attorney. “If you don’t file a claim,

you won’t be entitled to a refund.”