School districts, community colleges and redevelopment agencies understated property tax payments, costing the state at least $63 million between 2005 and 2007, according to the Controller’s Office.
“These reporting and calculation errors resulted in the state unnecessarily spending millions of dollars to backfill schools and community colleges for a portion of funds they did not receive or received and failed to report,” state Controller John Chiang said in a statement.
According to Chiang, here’s how it should go:
When a redevelopment agency (RDA) is established, a base property valuation is determined. As the area is redeveloped, property values grow. Twenty percent of the property tax growth above the base level goes to low- and moderate-housing projects. The RDA passes through a portion of the remaining additional property tax revenue to other affected taxing entities based on various formulas established by the Legislature.
"More alarming is that not only did these errors hurt the state's strained general fund, they also shortchanged low- and moderate-income housing projects and other local entities that provide critical services, such as police, fire districts and libraries," Chiang said.
Last year, the Legislature directed Chiang to assess whether property taxes were properly distributed and reported for purposes of offsetting the state’s obligations for school funding.
After two phases of review, the controller’s office found K-12 school districts and community colleges were improperly reporting property taxes passed through to them from redevelopment agencies.
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