Decline in local property values is hurting schools
By Kate Carter
About 1,400 properties in Los Gatos and Saratoga lost value last week, but the real losers are the schools that depend on high property values for funding.
The Santa Clara County Assessor's Office on May 13 announced that, because of the local economic downturn, it has temporarily reduced the assessed values of nearly 29,000 properties, about 28,000 of them single-family homes, throughout the county. The reductions total about $3.7 billion dollars and a 15 percent decline from last year.
However, the assessed value of all the county's properties actually grew by 6.27 percent, down from the 13.75 percent growth of last year and the 11.09 percent growth the year before that. This year's number of property devaluations is the highest since 1998, when there were about 30,000 devalued properties, but pales in comparison to the nearly 100,000 properties devalued in 1995.
The assessor's office on May 17 mailed postcards to all property owners informing them of their properties' assessed values. Even though the lower values will mean lower taxes for property owners, no one likes to see their property lose value, said David Ginsborg, the assessor's office spokesman.
"It's a benefit, but it's not really something to look forward to," he said, adding that property owners are losing more money than they are gaining in this situation.
However, the assessor's office is required to assess properties every year to determine the lowest value of the property on which the owner must pay taxes. Under Proposition 8, if a property is valued above the market rate value, the assessor's office will temporarily reduce that property's value to the market rate until the market catches back up with the value of property. Under Proposition 13, if a property is valued above the market rate, the assessor will add no more than 2 percent annually to its value at the time of purchase or construction.
The reason so many of the reassessed properties were residences in high-income areas, Ginsborg said, is "that's where the market declined. People who bought at the height of the market--those are the people that are affected here."
In Los Gatos, 730 properties declined a total of about $143 million, or 18.6 percent. In Saratoga, 695 properties declined a total of about $278 million, or 22.4 percent. Those two communities are among the county's top five to have the highest percentages of decline.
Public schools and community colleges receive 61 percent of the property tax revenue from the county's properties, with the rest going to the county, city redevelopment agencies and other special districts and agencies.
Los Gatos-Saratoga Joint Union High School District Superintendent Cindy Ranii said the biggest factor for her district is the overall property value growth percentage. She said that staff has drafted a preliminary budget anticipating a 10 percent growth, down from last year's 13.75 percent. The actual growth of 7 percent has staff trying to figure out how to balance its budget with approximately $600,000 less than expected, she said.
"That's a critical concern for us," she said. "It's more of a decline than we had hoped for."
Ranii said the staff had already identified $900,000 of reductions. It is now trying to identify additional revenue sources or cuts to make up the extra $600,000, and it is facing increased salary, benefits and energy costs, as it does every year, as well as small increases in the number of its students.
The school district, which covers all of Monte Sereno and portions of Los Gatos, Saratoga and unincorporated areas, receives its funds directly from property taxes paid by its residents. Ranii said that the decline in assessed value within the district's boundaries is about 22.8 percent, but that isn't the concerning number.
"The 7 percent--the bottom line to us is that," Ranii said. "We're still getting more property tax dollars than we did last year."
To challenge the assessor's valuation of a property, call 408.299.5300 or visit www.scc-assessor.org before June 15. Property owners can formally appeal an assessment between July 1 and Sept. 15.
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Los Gatos, California Since 1881
