By Ryan Thomas Riddle
Assessor-Recorder Phil Ting is the victor in the high-stakes battle against the Catholic Archdiocese of San Francisco. The church has been ordered to pay an estimated $14.4 million in transfer taxes to the city. But the victory comes on the heels of the California State Board of Equalization’s decision to slightly lower property taxes statewide.
On Tuesday, Dec. 4, the Transfer Tax Review Board voted 3-0 in favor of the Assessor’s Office, resulting in what the office is calling “the second largest transfer tax event in our city’s history.” The board decided that the Archdiocese’s extensive 2008 property transfers were taxable under the Real Property Transfer Tax Ordinance.
Ting said via phone conference that board’s decision shows that his office has been “aggressive and fairly enforcing the law.” He added that while the Assessor’s Office may have turned a blind eye in the past, the board’s verdict shows that every taxpayer gets treated the same under his watch. “We have worked hard to ensure every taxpayer is being assessed transfer taxes in a fair and consistent manner.”
How the diocese is going to pay up has yet to be determined, according to Ting. The easiest way would be for the diocese to “cut a check,” he told the Guardian. However, it’s expected that the diocese won’t be able to file an appeal until the transfer taxes are paid. And until it does, the Assessor’s Office will continue to charge interest.
But the victory was also a case of “win some, lose some.” Board of Equalization (BOE) chairwoman Betty T. Yee’s office announced on the same day announcing the BOE’s decision to lower property taxes by 0.237 percent. The release calls this a “negative inflation factor.” Translation: deflation.
The release states: “This is the first time such a broad scale reduction in property tax base year values has occurred. Since the passage of Proposition 13, the inflation factor has never before been negative, and in all but five years the annual adjustment has been capped at 2 percent.”
Ting said “going negative isn’t a positive thing.” His office calculates that the city could potentially lose an estimated $3 million in property revenue for 2010-2011. However, the numbers are still being crunched. One thing is for certain: everyone will see a decrease in their property taxes.
“Every property owner in San Francisco that didn’t get a reduction will get a reduction,” Ting said.
However, one property owner will be exempt from the lower rate—the Archdiocese of San Francisco. According to the Assessor’s Office, the church doesn’t have to pay yearly taxes on its properties because of its non-profit status, which the Transfer Tax Review Board’s decision doesn’t change.