By Heather Murtagh
A $3 million tax rebate for Oracle CEO Larry Ellison means a $1.5 million hit to education with $600,000 coming from the budgets of 11 local school districts.
Schools receive the largest portion of property taxes in San Mateo County and thus, schools will also take the biggest hit as a result of the large rebate. The way a district is funded — property taxes or the state — determines if it will directly cut its share of the $3 million rebate. About $580,000 will need to be taken out of this year’s budget in the 11 affected districts. Looking ahead, the reassessment will also result in a loss of revenue in future years.
“It was disheartening to be notified of the tax refund,” said Liz McManus, chief business official for the San Mateo Union High School District. “The children of San Mateo County will be adversely impacted by this decision.”
A rise in reassessment applications has occurred in the last year, said Terry Flinn, deputy assessor county clerk recorder. The requests are coming in clusters, he said, mainly from home owners in recently developed subdivisions in the northern part of San Mateo County.
San Mateo Union High School District’s share of Ellison’s rebate is $193,525, according to the county Assessor’s Office. That equates to about the district’s total cost for two teachers, McManus said.
The cuts are a result of a $3 million tax rebate recently awarded to Ellison. His home was previously assessed taking into consideration the land value — which was purchased for $12 million in 1995 — and the nearly $200 million spent to build the Japanese-style home on 23 acres in Woodside. Ellison’s lawyer successfully argued the property is no longer functional and realistically worth $64.7 million. The San Mateo County Assessment Appeals Board, agreed lowering the tax rate and calling for a $3 million rebate. That repayment will come from the numerous places to which the taxes were sent — including the county, cities and schools, said Deputy Controller Kanchan Charan.
Repayment of the $3 million was divided among the different agencies according to the amount originally allocated, he said.
Not all school districts, however, will need to budget for the repayment.
School districts can be funded in one of two ways. San Mateo Union High School District, for example, is a basic aid district which relies on local property taxes with less state support. A revenue limit district receives a set amount of money for each student from the state. Basic aid districts will need to cut the cost from this year’s budget. The loss to revenue limit districts, on the other hand, will essentially be covered by the state, said Charan.
Just over $580,000 of the $1.5 million will be cut from local district budgets. Of that, $188,631 will come from the Sequoia Union High School District.
Both San Mateo and Sequoia have a special reserve for such rebates. The reserve became a requirement for districts after massive rebates were granted after the economic downturn following the terrorist attacks of Sept. 11.
In addition, the lowered tax rate also means a loss of revenue in future years, said Ed LaVigne, assistant superintendent of administrative services for Sequoia. That equals over $60,000 annually for Sequoia, he said.
For some districts, the impact of a large tax rebate is not so apparent. The San Bruno Park School District is currently considered a basic aid district, but not by much. If more homeowners are granted rebates, the district could be deemed a revenue limit district, said Superintendent David Hutt.
The determination will be made later this month. Until then, the district is playing the waiting game.
Heather Murtagh can be reached by e-mail: email@example.com or by phone: (650) 344-5200 ext. 105.
The $3 million tax rebate for Larry Ellison will come from many places, including school budgets. This is the share for school districts in San Mateo County. A * after the amount denotes the district is funded through local property taxes. These school districts will need to cut the amount from the current school year’s budget. The other districts are funded mainly through the state. Those shares will be covered by the state.
Bayshore Elementary $4,099.37
Belmont-Redwood Shores Elementary $44,561.32*
Brisbane Elementary $8,948.32*
Burlingame Elementary $25,920.97
Hillsborough Elementary $26,192.96*
Jefferson Elementary $44,446.56
Las Lomitas Elementary $21,804.27*
Menlo Park Elementary $37,513.15*
Millbrae Elementary $20,732.81
Portola Valley Elementary $16,279.36*
Ravenswood Elementary $26,251.72
Redwood City Elementary $83,274.38
San Bruno Park Elementary $34,199.63*
San Carlos Elementary $27,837.90
San Mateo-Foster City Elementary $123,450.64
Woodside Elementary $9,245.45*
Jefferson High $68,253.74
San Mateo Union High $193,525.90*
Sequoia Union High $188,631.38*
Cabrillo Unified $39,024.70
La Honda-Pescadero Unified $6,096.74*
South San Francisco Unified $135,243.58
San Mateo County Community College $206,911.13
County education tax $107,678.78
Source: San Mateo County Assessors Office