Editor’s note: BenitoLink apologizes for two errors that were brought to our attention by San Benito High School Superintendent Tennenbaum. The average annual assessment is $13 per $100,000 assessed home value. The figure used, $20 per $100,000 in the article, is valid but on the high end of assessed value.
BenitoLink confused school district ability to reduce parcel taxes for seniors with the ability to have a reduction in general obligation bond rates for seniors. (The sentences that have been changed in the article are in italics.)
Fall is tax bill season for homeowners, and this past fall there was more grumbling than usual about taxes, especially around Hollister. BenitoLink talked to several property owners to find out why. Changes in billing have hit a sore spot and some residents are re-evaluating the California dream.
In late 2019, Hollister homeowners received not one, but two property tax bills, and some even received a third notice, with new figures.
“The first one was sent mid to late October,” said Melinda Casillas, county treasurer-tax collector. “The county realized two voter-approved bond measures were not on the original bills. Our office had to send corrected bills, which occurred late October.”
Casillas said she and Joe Paul Gonzalez, county auditor, made the decision to send out the amended bill.
“Unfortunately, the bills are printed with my name on them, so I am the target of complaint,” she said.
Resident Gerry Wright told BenitoLink she complained after receiving her third tax bill on two newly constructed homes she owns as rentals. She called Casillas’ office to find out why.
“I found that my first tax bill was based on the builder’s assessed value and the third one adds the increase in value at the time of the sale to me,” she said. “What an increase—it almost doubled.”
Casillas confirmed Wright’s findings.
“The assessor values property for the first bill as of Jan. 1 every year. The owner at that time (Jan. 1) gets a bill in October,” she said. “In the case of a home in the building stage, the value would be based upon the stage of the home on Jan. 1. Once the home is sold, the assessor is notified and they do a full assessment (usually based on the sales price), and a ‘true-up’ (supplemental bill) is calculated and sent to the new owner.”
When BenitoLink reported in November that the San Benito High School District Board of Trustees proposed to place Measure L, a $30 million bond, on the March 2020 ballot, the majority of comments on BenitoLink’s Facebook page expressed dismay at yet another bond being added to local property taxes.
In 2018, 691,145 Californians left the state, according to census migration data. The high cost of living, including property taxes, was a primary motivation for leaving, according to LA Biz magazine. Top destinations were Texas, Arizona, Washington, Nevada and Oregon.
The median priced home in San Benito County sells for $540,300, according to taxrate.org, which is not far from the Monterey County median of $573,500, but nowhere near Santa Clara County’s median price of $1.2 million.
These prices are a far cry from the states Californians are moving to. The median home price in Texas is $369,000; $258,700 in Arizona; $391,000 in Washington; $282,800 in Nevada; and $346,300 in Oregon.
If local voters approve Measure L in the March 3 primary, $13 per $100,000, or approximately $65 per $500,000 in assessed value would be added to that median-priced home’s property tax. (This article previously used $20 per $100,000, which is also correct but is at the high end of assessed values.)
By itself, it may appear to be a reasonable amount, but it is in addition to other bonds and fees that homeowners are now paying.
Casillas said there are already eight school bonds (see sample property tax bill), not counting Gavilan College bonds, on Hollister residents’ property tax bills. Those in San Juan Bautista or in unincorporated areas differ.
“What appears on an individual’s tax bill depends on where they live in the county.” Casillas said.
All told, there are 77 bonds or fees spread throughout San Benito County, according to documents provided by Casillas.
As of 2018, California is the only state to use parcel taxes as a method for funding schools, according to BallotPedia.
The parcel tax is used in California to fund K-12 public education and to fund community facilities districts usually known as “Mello-Roos” districts.
California permits, but does not require school districts to grant parcel-tax exemptions for those age 65 or older and persons with disabilities.
Santa Clara County has 23 school districts out of 32 that benefit from exemptions allowed by Section 4 of Article XIII A of the California Constitution. Most school districts required senior homeowners to contact the districts concerning eligibility. And if they did obtain the exemption, they had to request annual renewals.
General Obligation Bonds
In California, general obligation bonds are the primary method for funding school facilities. Passage of a general obligation bond measure enables school districts to access matching state fund grants. According to San Benito High School Superintendent Shawn Tennenbaum, the district “does not have any discretionary legal authority to grant senior exemptions on general obligation bonds.”
He said current California law states that “all taxable property within the district is taxed to repay bonds, and that under existing case law, exemptions from taxation always has to be specifically stated by the legislature. Currently, no exemptions are stated for general obligation bonds.”
Baby Boomer Anxiety
According to the 2019 Edelman Report, 72% of Californians say the high cost and lack of housing is a serious issue and 53% are considering moving out of the state. Hollister realtor Ray Pierce believes many of those who decide to move are actually empty nesters, which includes millions of retired Baby Boomers (born 1946 to 1964), who want or need to downsize.
Realtor Karson Klauer told BenitoLink the cost of school bonds is a factor in many homeowners’ decisions about whether to stay or leave.
“It does tend to affect the older property owners more than the first-time home buyers,” he said. “People who have been in their homes for decades tend to have lower property tax bills overall, so each new bond is noticeable, especially for those on fixed incomes. First-time home buyers have usually come to grips with the fact that they’re going to be paying large property tax bills (in some cases $10,000 or more). They are also moving up in their careers and have a better capacity to take on the costs associated with new bonds.”
Klauer said he doesn’t know how many of his clients have left the state because of property taxes.
“It may be part of the equation but being able to have a less strenuous commute and a general tiering of taxes and regulations are the more vocal reasons given for moving out of state.”
Bob and Debra Mattos have lived across the street from San Benito High School for 17 years, and until last year they were not aware of the number of school bonds included in their property taxes. Debra said their annual property tax is over $5,000, which is one reason they are thinking of moving to Texas.
“They’re putting bonds on the backs of homeowners, some of whom are elderly with set incomes and don’t have the ability to have a higher income,” Debra said. “There will definitely come a point where enough is enough and we can’t afford it.”
She said she will not vote in favor of Measure L.
“One of the things that I think this city and county are so stupid about is they wait until absolutely everything is falling apart before they do anything,” she said, “and then they put out these large bonds on us. And they don’t have exemptions.”
Ken and Jen Varnes moved to Sunnyslope Village nine years ago. Ken said when they bought their home, they were not aware of just how many school bonds were included in their property tax bill, which he said averages $8,000 annually. Since both work, Ken said he doesn’t think property taxes alone would force them to consider moving.
“We would, though, be pushed out more by all of the taxes and politics surrounding California,” he said. “But I don’t think for the current high school, we need another bond. I think we need a whole new high school. As nice as it is for a high school, it’s way too impacted to have more money be put into it rather than finding a place for another school.”
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