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YourHub.com \\ Santa Clarita Valley \\ Stories \\ News \\ Government

County Gets $20 million in Surplus Taxes from SCV

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Contributed by: Chris Austin on 2/9/2007

The agenda and staff reports for the upcoming meeting have been posted on the City's website. The Santa Clarita City Council will be discussing annexation at its meeting next Tuesday night, February 13th. The staff report, prepared by city planner Kai Luoma, discusses 'revenue neutrality' and cites a study that concluded that the county is collecting over $42 million dollars in revenues from the westside communities, but only paying out $20 million in services.

The staff report discusses this issue of 'Revenue Neutrality', stating: "Revenue neutrality" is a provision that was added to the State Government Code in 1992 that essentially states that a new incorporation cannot adversely impact the finances of the County in which the incorporation occurs. Simply put, a County is required to give to the newly incorporated city only the amount of revenue that it is currently paying to provide services to that area.

"If a County is collecting more tax revenue from the area than it spends to provide services to that area, the County is allowed to keep the additional surplus funds.
There is no requirement that it ever give up these funds. The County also has the option to negotiate a revenue sharing agreement with the new city, if it so chooses."

Note: Supervisor Antonovich has been unwilling to negotiate any such agreement with the City of Santa Clarita. The staff report goes on to say: In a recent study by Applied Economics, it was found that, each year, the County collects over $42 million from the unincorporated areas of the Santa Clarita Valley in the form of property tax, sales tax, and the utility users tax that all unincorporated County residents and businesses pay, and other taxes and fees. The overwhelming majority of these taxes come from the westside, where residents and businesses are concentrated. The study also found that the costs of providing municipal services to the same unincorporated County areas were just under $21 million.

The study concludes that the residents of the unincorporated areas are paying over $20 million more than they are getting back in the form of municipal services. Over $20 million being generated in the unincorporated Santa Clarita Valley is being used to fund County programs and pay County bills outside of Santa Clarita".

You can read the entire staff report by clicking here.

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