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County threatens tax revolt

Officials plan to keep $500 million from state

Posted: February 5, 2009 12:56 a.m.
Updated: February 5, 2009 4:55 a.m.

Consider this your invitation to the Boston Tea Party.

The venue is changed and calendar reset, but the issues behind a tax revolt and the withholding of tax money owed to the state is an option considered by the Los Angeles County Board of Supervisors.

"The (supervisors) are declaring our own Boston Tea Party right here in Los Angeles County," said Supervisor Gloria Molina, representing the county areas of Azusa and Pomona.

Under her plan, the county would withhold half a billion dollars it would regularly pay to the state.

California State Assembly Republican Member Cameron Smyth who represents the 38th Congressional District, which includes Santa Clarita Valley, said Wednesday Molina's "tax revolt" is not the first time he's heard of it.

"I knew it was a topic of discussion because it was brought up at the California State Association of Counties," he said Wednesday. "It was actually a legitimate topic brought up."

A bulletin posted by the association on its Web site, claims: "Counties simply do not have the means to cover this significant shortfall and maintain services to needy Californians."

The move is a reaction to the lingering California budget crisis. The state has said it will defer $3.5 billion in payments to counties - including $1.4 billion to Los Angeles - until lawmakers close a $42 billion deficit.
Taxpayers are heading into "uncharted territory," said the former Mayor of Santa Clarita.

Having served six years on the Santa Clarita City Council, Smyth said he understands the frustration.

"When you have no idea what the state is going to do, it is extremely frustrating," he said. "I'm very interested to see what comes out of the closed-session talks and what the legal implications are."

On Tuesday, supervisors asked county workers to determine if the county can legally hold on to tax revenues it normally collects and passes along to Sacramento.

Supervisors are expected to huddle behind closed doors next week to ponder a revolt.

"It seems like everyone is panicking except the lawmakers in Sacramento," said Supervisor Michael D. Antonovich. "They have to recognize the severe impact their inaction has created. We don't have the resources to maintain a system of services without resources and if they cut off the supply of funding our only alternative is to put a ‘For Sale' sign out."

Smyth said he's confident a budget can be hammered out soon.

"I do believe there are enough members that do not want to go off the fiscal cliff," he said. "It's almost daily that you feel like you're getting close but then things pull away."

Los Angeles County collected more than $506 million from a variety of sources, including $125.7 million from District 5 which includes Santa Clarita Valley, according to its annual report for 2007-08.

Property assessed for the county's unincorporated areas totalled more than $1 trillion, according to the report.

People living in unincorporated areas of Santa Clarita Valley such as Castaic and Stevenson Ranch might find themselves motivated to join the tax revolt and show their displeasure with state politicians since it would be their money the supervisors withhold.

Withholding the tax would also affect city residents.

Darren Hernandez, Santa Clarita's deputy city manager and city treasurer, said cities, "unlike counties, do not collect tax revenue on behalf of the state."

A tax revolt such as the one proposed by Molina would involve county taxpayers and county money.

"The reported supervisor's plan to withhold taxes due the state has no impact on the city of Santa Clarita," Hernandez said. "This is an issue between the county and the state, and although we understand their frustration, this action does not appear to impact city revenues at this time."


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