School districts drag feet on tax exemptions

When campaigning for property tax hikes for schools, boosters widely pledge to exempt older property owners from paying the taxes. But after voters pass the taxes, some school districts make it difficult to learn about the exemption, and even place impediments to senior and disabled property owners applying for them.

That’s a finding of the 2016-’17 Santa Clara County Civil Grand Jury, which surveyed how K-12 districts handle applications from property owners seeking a break from school parcel taxes.

While the jury didn’t find any intentional wrongdoing, it did find room for improvement.

To get a tax exemption allowed by law, “people shouldn’t have to make a special request. It should be part of the regular routine, something that you can mail,” said Marie Young, a member of the the 2016-’17 grand jury.

Indeed, many homeowners eligible for the exemption apparently know nothing about it.

“I’m 95 and I had never heard of it,” said Lucille Connick, who lives in the Almaden Valley. She found out about the exemption that San Jose Unified offers to its recently passed $72 annual parcel tax from real estate agent Rich Crowley, who was contacting homeowners he thought would qualify.

“I was surprised and very grateful,” Connick said. “It makes a big difference; $72 to me is a lot of money.”

It’s hard to determine the precise number of senior homeowners qualifying for breaks on parcel taxes. The grand jury estimated 30,000, but conceded that was an extrapolation from several sources. That number could be low by a large margin, judging from the tiny percentage of exemptions actually claimed in school districts, and the fact that about 75 percent of Bay Area residents ages 65 and over own their own homes, according a 2015 report for the labor-backed institute Retirement Security for All.

Only 1.1 percent of parcel owners in the Franklin-McKinley and Oak Grove school districts and 2.5 percent in the Berryessa and Sunnyvale school districts claimed senior exemptions in 2016. In contrast, the percentages were 12.6 percent in the Los Altos School District and

13 percent in the Palo Alto School District — which also happens to impose the highest annual parcel taxes in the county, $790 and $773 respectively.

Crowley on his own had inquired with several districts about how to apply for parcel tax exemptions, and believes that they deliberately make the application process difficult.

“The lack of cooperation I got from the districts is unbelievable,” he said.

For example, San Jose Unified, which passed its parcel tax in November, after the grand jury completed its research, didn’t post exemption information online until March.

“We felt that a 3.5-month window provided adequate opportunity for property owners to learn of the exemption, request an application and return it,” district spokesman Peter Allen wrote in an email.

San Jose Unified’s application period for the 201718 tax year is closed, and the district doesn’t plan to post the 2018-’19 application online until next spring, according to Allen.

“They want to take care of it one time a year for their convenience,” Crowley, 71, said. “It’s not for the convenience of the seniors.”

The district’s parcel tax exemption form mentions the benefits that the district reaps from the parcel tax, Crowley noted, an apparent attempt to dissuade people from applying.

For their report, the grand jury examined the 22 school districts in Santa Clara County that grant parcel tax exemptions to taxpayers 65 and older. About half also offer exemptions to those receiving federal disability benefits.Two districts — Alum Rock in East San Jose and Morgan Hill Unified — don’t allow any exemptions.

Several school districts require property owners to submit their exemption applications in person and required yearly applications for extensions. A state law that took effect this year requires that parcel tax exemptions remain in place until the taxpayer is no longer eligible, such as when the property owner dies or sells the home, or a disabled person is deemed no longer disabled.

Tanya De La Cruz, a spokeswoman for the Moreland School District, did not explain why the district requires seniors to appear in person, except to say that it is “a process we use to be fiscally responsible with funds approved by the community.” Despite the state law, Moreland still requires homeowners to confirm their eligibility — that they haven’t died, moved or sold their home — annually to retain their tax exemptions.

Parcel taxes are property taxes that are approved by a two-thirds majority of voters, and supplement schools’ normal property tax and state revenues. In the county, 25 of 32 school districts have passed parcel taxes.

The grand jury found that some district employees didn’t understand the administration of exemptions, that school board members provided conflicting information and that some district websites were difficult to navigate or failed to mention parcel taxes.

The grand jury issued 15 recommendations, including doing annual outreach to property owners, setting up a quick link on web home pages, allowing applications to be processed online, creating consistency among districts, and including exemption information on property tax bills.

School districts have until late August to respond to the grand jury’s report.

The Union School District in San Jose already has revamped procedures, and now accepts applications by mail, has added parcel tax information to its web home page and later will accept applications throughout the year, Assistant Superintendent for Business Services Rita Sohal said. Other districts are reviewing their responses.

“Some have changed,” Young said, “and we’re very happy about that.”