Appeals court upholds decision to nix parts of 2008 tax

Appeals court upholds decision to nix parts of 2008 tax

Michele Ellson

Updated at 10:03 a.m. Thursday, March 7

A state appeals court has affirmed an earlier decision striking much of a 2008 school parcel tax, saying the school district had no right to impose different tax rates on residential and commercial property owners. The court plans to send the Measure H lawsuit back to a local trial court to determine whether much of the money collected over the three years the tax was in effect must be repaid, though it could also be appealed to the state Supreme Court.

A three-judge First Appellate District court panel ruled Wednesday that state law didn't allow the Alameda Unified School District to charge commercial property owners 15 cents per square foot up to a $9,500 cap while residential property owners paid $120 per parcel. The decision was essentially the same as the one the panel issued last December, which the court vacated at the school district's request. Both decisions said state law requires school districts' special taxes to be applied uniformly and that the only exception the law permits is an exemption for seniors and low-income disabled people.

"Measure H has laudatory goals to provide critically needed additional school financing for the Alameda Unified School District; but we cannot rewrite an enabling statute, nor enlarge or contract it, where the words do not allow any other plain meaning," Justice James J. Marchiano wrote in a concurring opinion.

The justices said state legislators who drafted statutes permitting school and other special districts to levy special taxes in the wake of Proposition 62, which restricted the imposition of such taxes, deliberately chose not to allow districts to impose different tax rates, even after they requested the right to do so. Four school districts - Albany, Kentfield, Lagunitas and Mill Valley - asked state legislators in 1987 to include a senior exemption and to allow the different tax rates, which Albany imposed. Only the former exemption to the uniformity clause was included.

Superintendent Kirsten Vital said they are still reviewing the decision; Vital said district leaders will discuss next steps with the school board at its next meeting. If a local court determines refunds are due, the district could be forced to repay up to $7.4 million, and in a statement issued Thursday, Brillant said he may also seek interest.

“My clients in the Borikas case and in the new parcel tax cases that we filed in Yolo, Alameda, Contra Costa and Los Angeles counties are very pleased with the decision from the First District Court of Appeal," he said in his statement, which noted that Alameda's school board voted to move the case to the state Supreme Court and that their decision about how to proceed is due in 40 days. "Taxpayers should be pleased with this result but again I caution that we are still far away from the potential large refunds due to taxpayers.”

Brillant is also representing property owners in a quartet of other lawsuits challenging recently passed school parcel taxes benefiting the West Contra Costa, San Leandro and Davis school districts and another for a group of suburban Los Angeles districts. Meanwhile, Assemblyman Rob Bonta has put forward a bill that could allow similar split-roll taxes, though it's not clear if taxes like Measure H could be retroactively protected by the state Legislature.

Related: School district could owe refunds on 2008 parcel tax

Court will rehear decision to nix portions of former school parcel tax