South Bay property tax reduction a double-edged sword

February 1, 2010 11:44:49 PM PST
Homeowners in the South Bay can expect a break on their property taxes this year, but not everyone is happy about it. Schools and public service agencies are struggling to make ends meet, and a cut in property taxes could mean a cut in services in Santa Clara County and beyond.

When homeowners in Santa Clara County receive their property tax bill later this year, they will notice a change. The amount due will likely be less.

"Economic times are tough for everybody right now, so any savings we can get is good," said San Jose homeowner Gil Garcia.

You can thank deflation. The Consumer Price index, the formula used to determine rate changes, fell below zero for the first time since Prop 13, the 1978 state initiative that limits property taxes.

So instead of the usual 2 percent maximum increase, most homeowners will see a .237 percent reduction on their property taxes.

Most of the reductions in Santa Clara County will be no more than a hundred dollars; not a huge amount, but collectively that adds up to about $70 million.

For a county that has already had to slash budgets in this recession, that is a significant hit. The Santa Clara Unified School District already plans to alter its student-teacher ratio in K-3 education to save money.

Twenty students to a teacher will soon be a thing of the past.

"It's not as intimate, obviously, but can you teach at 30 to 1? Yes. Is it better? In my opinion, no," said Santa Clara Unified School District superintendent Steve Stavis.

Other counties are facing the same situation. But Santa Clara County assessor Larry Stone is going so far as encouraging people to follow his lead.

"I'm going to get, in my property, because I've owned it for 38 years, a $53 reduction," he said. "I'm going to contribute that back either to my local school district or to the county hospital. They need it more than I do."

Homeowners will be notified what they owe before July, which depending on one's perspective, will either be a nice reprieve from annual tax hikes or a blow to local governments.