Gov. Schwarzenegger gave Stanislaus County a financial break Wednesday, signing a bill that lets the local government keep a greater share of the property taxes it collects.
Sen. Dave Cogdill, R-Modesto, wrote the bill, which places a cap on the taxes Stanislaus and five other counties send to schools each year. The state is expected to make up the lost revenue to school districts.
The bill is intended to reverse a revenue shift from 1982 that was meant to help local governments staunch losses they incurred after voters passed Prop. 13 in 1978 to limit property tax increases. That revenue swap compounded losses for six small counties, including Stanislaus.
Stanislaus says it has paid out $52 million to school districts that it should have kept for the county over the past 28 years.
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The county is expected to gain about $400,000 over the next two years if property values increase. It would not benefit if property values hold steady or fall.
“This is a fairness measure designed to correct an injustice that has continued to plague six counties for over two decades,” said Sen. Jeff Denham, R-Atwater, a co-author of the bill.
Stanislaus would begin sending money to schools again after two years. The measure also includes added protections so the county will not have to contribute more if future tax receipts fall, Cogdill spokeswoman Sabrina Lockhart said.
“During these difficult economic times, all counties are faced with the difficult choice of putting important programs on chopping block,’ Cogdill said. “However, funding shifts that were intended to help local government have actually hurt some counties, creating an even larger budget challenge.”
Valley lawmakers have sought changes to help Stanislaus County keep a larger share of its property taxes for years. Two bills have reached the governor’s desk, but both were vetoed.
Stanislaus County keeps 11 percent of the property taxes it collects; the state average is 19 percent.