Camp Fire Property Tax Losses to Hit Outside Burned Area
BY STEVE SCHOONOVER (via CoStar Group)
OROVILLE–Jurisdictions outside the burned area of the Camp Fire are still going to get scorched by the flames, according to a report presented to the Board of Supervisors this week. But the state is being asked to cover the impact.
All of the properties that were burned by the Camp Fire are being reassessed and will have lower property taxes reflecting their reduced value. That means reduced revenue for governments, and this year it sorts out in ways you might not expect.
According to estimates in a report by outgoing Auditor-Controller David Houser, in the 2018-19 fiscal year the lightly singed Chico Unified School District will take the biggest hit—almost $4.2 million—while the almost completely burned Paradise Unified District will see a loss of $890,000 in property tax revenue.
The city of Chico’s revenue will drop by $808,000; the town of Paradise will have just $366,000 less.
The reason agencies that didn’t burn would see their property tax revenue drop more than those that did is that it’s a mid-year adjustment. When that happens, the change is spread among all the agencies in the county, according to Butte County Deputy Chief Administrative Officer Meeghan Jessee.
The amount of the change each agency absorbs is proportional to the percentage of countywide property tax revenues it would ordinarily receive, according to Jessee. It can go both ways: If a project were to be completed that would boost property tax revenues mid-year, all the agencies in the county would benefit, not just the one where the project was located.
But in the 2019-20 fiscal year, which starts next July, property tax revenue will be based on the value of the property within each jurisdiction. For that year, Paradise’s town government, school district, park district, and irrigation district will see drops in revenue far greater than Chico, Oroville or other unburned areas.
The county will also likely see a big hit next fiscal year. It has been estimated it will lose $2.26 million in property taxes this year, with perhaps another million in other lost revenues. Next year the total impact could be as high as $6 million, Jessee told the supervisors.
Houser’s report is very preliminary. “Please keep in mind that these loss of property estimates are fluid as Cal Fire is continuing to complete their inspections,” he wrote.
But as of Nov. 20—the date of the report—the loss of property tax revenue countywide totaled almost $15.5 million.
The hit ranged from $139.45 for a street lighting district in Stirling City, to CUSD’s bill. Butte College will lose $1.2 million in revenue; Oroville, $179,000.
Efforts are underway to offset the losses, however. Typically, the state will “backfill” local losses with state funds in case of emergency. Assemblyman James Gallagher, R-Yuba City, has already introduced a bill – AB 42 – to do that. The county and other local jurisdictions are asking for at least some of those payments to be expedited, as backfill is usually put in the upcoming state budget. Many local agencies will have cash flow problems if they have to wait until next summer for funds.
Gallagher has also introduced AB 41, which would have the state pay 100 percent of the costs responding to the Camp Fire that are not covered by the Federal Emergency Management Agency. FEMA typically only covers 75% of such costs.
Jessee told the supervisors Tuesday that so far, the county’s cost for responding to the fire is $14.4 million.
That doesn’t include losses to county property, like four snowplows and a dump truck that burned up, which should be covered by insurance.
The county, Paradise, Chico, Oroville and Gridley are also preparing a list of other legislative relief they’d like to see. That includes back filling property taxes for five years, and sales, use and transient occupancy taxes for two years. For Paradise the support period would be 10 years.
The list includes funding a sewer for at least the commercial areas of Paradise and paying for additional escape routes off the ridge.
The state has been asked to pay for the cost of the Cal Fire contracts for Paradise and the county for two years, and for seven seasonal fire stations that the county pays extra to keep open year-round.
The list is changing constantly, Jessee told the board.
Property Tax Reductions
Here are the agencies that will see their property tax revenues reduced by more that $100,000 this year, although efforts are underway to have the state cover the losses. Next year just the burned areas will see property tax reductions.
- Butte County: $2.26 million
- City of Chico: $808,152
- Town of Paradise: $336,131
- City of Oroville: $179,254
- Butte College: $1.2 million
- Education augmentation: $1.6 million
- Chico Unified School District: $4.2 million
- County Office of Education: $754, 712
- Oroville Union High School District: $619,850
- Oroville City Union Elementary School District: $340,952
- Gridley Unified School District: $340,518
- Durham Unified School District: $292,145
- Biggs Unified School District: $201,798
- Thermalito Union Elementary School District: $111, 156
- Palermo Union Elementary School District: $110,072
- Chico Area Recreation and Park District: $306,384
- Feather River Recreation and Park District: $112,070
- Paradise Recreation and Park District: $103,053
- Butte County Mosquito and Vector Control District: $207,484