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Friday, Dec 21 2012 11:00 PM

JOHN NILON: County taxpayers shouldn't have to subsidize city

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    John Nilon

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The city of Bakersfield and the county of Kern have a complex relationship. Each jurisdiction strives to provide the very best services to its constituents. In an environment of heightened demands and limited resources, this is always a challenge. Key to the success of both agencies is finding an equitable balance of shared resources -- in this case, tax dollars.

When an unincorporated area of the county is annexed into the city, both jurisdictions must agree on the formula for sharing property taxes, sales taxes, transient occupancy taxes and other taxes. This is necessary for the city to provide services to its new residents and for the county to continue providing many other services that the city does not provide.

Vital services like prosecuting crimes, housing jail inmates, protecting children and spouses from abuse and neglect, safeguarding public health, supervising offenders on probation, search and rescue, coroner services, and libraries are funded by the county, not the city. So while sharing taxes may appear simple, it is a very complex agreement with far reaching consequences.

Through an internal review, it was recently discovered that for several years, the county has been incorrectly calculating the tax-sharing formula contained in its agreement with the city. Unfortunately, while this error has benefited the city by millions of dollars, it has deprived county taxpayers of vital services and local school districts of tax revenue that is lawfully theirs. The county auditor-controller has now corrected the property tax allocation error and the county has asked the city to negotiate the repayment of taxes erroneously given to the city.

The city has been unjustly enriched by millions of dollars, at the expense of county services and the schools. The county and the school districts are entitled to recover those funds, but instead of agreeing to repay the money it received by mistake, the city is suing the county to continue to receive taxes to which it is not entitled. The city continues to try and take taxes from the county and our local school districts. The county will vigorously oppose the city's misplaced efforts to receive tax revenue that does not belong to the city, and will fight to ensure that all taxing agencies and school districts receive every tax dollar to which they are entitled.

On a related matter, the county and city also share taxes designated for fire services. A recent audit revealed that the city has repeatedly overcalculated its share of fire fund property taxes by including the value of properties for which taxes are not collected, such as churches, thereby inflating the amounts due to the city. This error has also been corrected by the county.

Why should anyone care about this lawsuit? Because the residents of unincorporated Kern County are being asked to finance services for the residents of the city of Bakersfield. Bakersfield residents make up about 42 percent of Kern County's population, but they use a disproportionate share of services provided by the county. For example, 62 percent of county jail inmates are city residents, 74 percent of mental health services are provided to city residents, 72 percent of child abuse referrals are for city residents, and 60 percent of library usage is for city residents. City residents also make disproportionate use of Kern Medical Center, the public defender, the crime lab, the district attorney, the Public Health Department and other county services.

It costs the county general fund about $50 million to provide services to Bakersfield residents, but the tax revenue from Bakersfield totals only $33 million. In short, Bakersfield is not paying its share, and if you live in an unincorporated area of Kern County, you have been subsidizing Bakersfield residents. It is vital that the property tax split be correct so the county, the school districts, and all taxing agencies receive the tax revenue to which they are entitled by law. Perpetuating the error will only result in more inequities going forward.

It has always been the county's hope that equitable solutions could be found through discussion or mediation. The city has abandoned that approach in favor of litigation, which is a lengthy and costly course of action for both agencies and for taxpayers. The county continues to offer solutions for equity, and we hope that the city will comply with the terms of the agreement and recognize that a deal is a deal.

John Nilon is the Kern County administrative officer. Community Voices is an expanded commentary of 650 to 700 words.

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