In 2005, the City of Alhambra—along with 46 other cities, including Long Beach—filed a lawsuit against the County of Los Angeles claiming that they were overcharged in property tax administration fees (PTAF). After a ruling by the California Supreme Court in favor of the cities back in November, Long Beach has reached its settlement with the County and will receive $4,610,296.
The bloated charge is rooted in a budget move that changed the way PTAFs are calculated. Essentially, the State shifted tax revenue from counties and cities towards funding for education and bonds. The local losses were then backfilled by taking money from other sources, in this case property tax revenue. It is estimated that this move provided counties across the state with $40M in miscalculated PTAFs per year, $14M of that in Los Angeles County alone per year.
Under the November ruling—which has now prompted multiple cities across the state to sue their counties—Los Angeles County was forced to alter the way it calculated PTAFs and resulted in the paybacks now being handed out. In the case of Long Beach, its payment settlement covers six fiscal years, from 2006-2007 to 2011-2012, with a 7% annual simple interest on those excess withholdings, as allowed under the California Constitution.
“I am pleased to have resolved this amicably and look forward to continued cooperation with the County in serving the people we both exist to serve,” said City Attorney Charles Parkin in a statement. “These general funds of over $4.6 million will help the City to fund essential services to our residents and property owners.”
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