Surprisingly high numbers of California property owners have opted thus far not to pay a $150 state-imposed fire fee, keeping revenue below expectations, recent statistics from Board of Equalization (BOE) member George Runner indicate.
In fact, Runner said, the noncompliance rate to the fee—which he calls “an illegal tax”—is so far more than three times the rate the BOE expected when it began collection efforts.
In his Fire Prevention Fee Weekly Report of Nov. 30, Runner says that while notices of the fee have been mailed to all but six of California’s 58 counties, only $41.1 million of the anticipated $84.4 million has been mailed back to Sacramento so far.
Notices yet to be mailed of Nov. 30 to property owners in the six remaining counties—Trinity, Tulare, Tuolumne, Ventura, Yolo and Yuba—total 52,838, figures on Runner’s website show.
As of Wednesday, however, a Board of Equalization source said mailings were being sent this week to residents in Tuolumne county, leaving only three counties still unreached.
Of the approximately 825,000 notices the state plans to mail, more than 693,000, or about 84 percent, have been sent thus far, the report says. The payments logged so far reflect only about 48.6 percent return, according to Runner’s weekly report.
“This is an unusually high noncompliance rate,” Runner told the Mountain News Wednesday. “Twenty to 25 percent of people who were billed are not paying. That’s unusually high.”
Runner said the normal compliance rate for taxes in California is 97 percent. When it learned it would have to collect the fire fee, he said, the BOE anticipated a 7-percent noncompliance rate.
‘AN ILLEGAL TAX’
“To me, it’s an illegal tax,” Runner said. “It was put on by the legislature with a simple majority vote and it should have been two-thirds.”
As of Nov. 30, a total of 47,292 property owners were appealing the fee, the report says.
Including the 40,448 landowners in a non-final billing status who have paid in full, and the 291,601 whose bills were past due but have paid, a total of 332,049 of the 693,935 bills mailed so far are paid up.
A BOE spokesman said there could be various reasons for nonpayment, but said it’s reasonable to conclude the lower-than-expected payment numbers represent anger coming from taxpayers.
“People were caught off guard,” Runner said. “They think they should already be getting this service. It’s just wrong to tax people for services they’re already paying for.”
The fee, levied on all habitable structures in State Responsibility Areas (SRA), where Cal Fire has primary firefighting responsibility, is being challenged in court by the Howard Jarvis Taxpayers Association (HJTA), which claims the billing is a property tax and not a fee.
HJTA’s contention is that because the state legislature approved the charge by less than a two-thirds majority, as required by Proposition 13, it was illegally passed and invalid. The association has filed suit in Sacramento Superior Court to overturn it.
Property owners whose fire protection is provided by a local fire department are being billed only $115, so residents of Crestline, Lake Arrowhead and Running Springs have received bills with the $35 discount.
Advance notices that the bill is coming, as well as the bill itself, have been mailed to California counties in alphabetical order. Runner’s Nov. 30 report shows all property owners in California who are subject to the fee have now received those letters.
Mountain residents received tax bills with a payment deadline of Nov. 26.
Concerning the HJTA lawsuit, Runner said “it’s hard to tell what a judge may say. This will be appealed by one side or the other, no matter what the decision is. But I think it’s pretty clear this does not meet the test of a fee.”
That test, he said, is whether those who pay get a benefit in return. Runner cited the case of residents along the ocean or in the desert who are in an SRA but who get no benefit.
An ironic point, he said, is that, for people who get the bills, “if you live on your property you pay the fee. A guy next door can have a vacant lot and not have to pay.” Such lots, he said, can contribute more to the spread of wildfire than those with inhabitable structures.
Runner said the bills now being collected are for the current year. A second round of billings, for next year, will be mailed out in March, he said.
With Democrats holding a two-thirds majority in both the Assembly and State Senate, Runner said that should the Jarvis lawsuit win, “they’ve got the capacity to go back and do it over, with a two-thirds vote.”
60 DAYS TO DECIDE
Runner’s website says once Cal Fire has received a protest petition it will have 60 days to review it and issue a decision.
It also says decisions must be provided in writing, and petitions can be updated with new information at any time until Cal Fire’s final decision is announced.
“If it is determined that a refund is owed you, a claim must be filed with the Board of Equalization for repayment,” the site says. “The refund claim may be filed by either the property owner or Cal Fire.”
Though it has raised protest in many quarters, the money the state hopes to collect from the billings represents only a tiny fraction of the state budget, and would benefit just one department.
The 2012-13 state budget includes $91.3 billion in general fund spending and total spending—including money in special funds and funds received from the federal government—of $225 billion.
In 2002-03, the BOE spokesperson said, total state spending was $161.5 billion. The rate of increase of state spending has outpaced the rate of growth in the state’s population, including inflation, the source said.