From: Lila Hayes
Sent: Wednesday, April 08, 2005
To: info@oldfirerecoverygroup.org
Subject: OFRG weekly update

Hello everyone. Sorry for the multiple e-mail's this week (to the regular OFRG mailing list), but I just learned of this today and wanted to get this to you since immediate support is needed.

The Tax Assessor of San Bernardino County (Donald Williamson) has brought to light an issue that I thought you all might be interested in. I think you should also contact your own Tax Assessor (an elected position) and ask them what their stance is on this issue as well. Let me try to explain it in a nutshell.

Let's say when you lost your home, your home was worth $75,000 and the land was worth $25,000 (of course in some mythical place that is not located in California, but there's math involved so bear with me). After the fire the Tax Assessor should've removed the $75,000 improvement from your assessment and your tax bill should've been based only on the land value of $25,000. Every year the value can only be increased by 2% so the year after the fire your property tax was based on the land value of $25,000 * 2% or $25,500. Two years after the fire, your land value would be assessed at $25,500 * 2% or $26,010 and so on until you rebuild your house.

At the point you rebuild your house, the tax code provides you relief (because you are in a declared disaster) in that you can have your old tax basis back on your dwelling instead of the new market value of your house (which would've been the case if you had decided to voluntarily rip down the house and rebuild).

So you're thinking... okay, if it took me 3 years to rebuild my house, the value of the property would be taxed at $26,530.20 (which is one more year than the above example) plus $75,000 or $101,530.20. The fact is... that is not what they are doing! The tax assessors are actually continuing to increase the structure part of the land value AS WELL AS THE LAND PORTION of the value. So in our example, if you move into your house after 3 years, your tax would be based on $106,120.80.

So, now you might be thinking... well, it's only about $4,500 and I'm only charged a percentage of that $4,500 anyway. But remember, this number will continue to accumulate for the entire time you own your home. If you own this home for an additional 5 years past the time you reconstructed your house, the difference would be up to $12,874.45. 10 years after you reconstruct the house, your tax bill would be based on a value that is more than $22,000 above what it would be if they hadn't continued to accrue the value of the house that was no standing there for those years!

Of course most houses are way more in value than this so you'll have to do your own math but it is likely to be many times this number.

I hope you see the potential in this and contact your Tax Assessor and give them your opinion. The San Bernardino County Tax Assessor could also use your help in this matter. He is going to Sacramento on Monday to lobby the State Board of Equalization, who interprets tax revenue code for the Tax Assessors, and would like to know what you think of this matter. You can contact him as follows:

172 West 3rd St

5th Floor

San Bernardino CA 92415