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Harris Sherline: California’s New State Fire Tax Is Pure Smoke and Mirrors

As is so often the case, California legislators are attempting to impose a tax or fee on some group to solve a problem. This time it’s the rural fire fee.

On the surface it seems simple enough, but as is often the case, the bill includes provisions that give many property owners heartburn.

If you’re not familiar with this particular fee, it’s a $150-per-structure assessment that became effective last fall.

Tim Hearden, reporting in the Capital Press (Feb. 26), noted: “Gov. Jerry Brown has said he would like to expand the use of money from the fees, which are assessed from more than 800,000 residents served by the California Department of Forestry and Fire Protection.” (Who knew there was such a department?)

The state’s administration wants to be able to use the proceeds of the fee in “areas that border the regions where the fee is assessed.”

Jon Coupal, executive director of the Howard Jarvis Taxpayers Association, said: “This tax was dreamed up by politicians in Sacramento who are so desperate for revenue that they were willing to ram this through the Legislature without the proper two-thirds vote. The fire tax is a direct violation of Prop. 13.”

The HJTA has filed a lawsuit to overturn the fees, arguing that they “violate an initiative passed by voters in 2010 that require a budget containing tax increases to pass the Legislature with a two-thirds majority. The 2011-2012 budget package, which included the fees in an effort to raise $85 million to offset costs to CAL-FIRE, passed by simple majorities.”

The HJTA website provides the following information: “The State of California has begun mailing bills to rural property owners for fire prevention. ... If you own habitable property in CAL-FIRE’s jurisdiction (known as the State Responsibility Area), you are affected. You will eventually receive two bills this year, one for the state’s 2011-2012 fiscal year and one for its 2012-2013 fiscal year. ... Each bill will be $150 per habitable structure on your property. For example, if you have one house on your property, and no other habitable structures, you will receive two bills this year totaling $300. On each bill there should be a $35 credit if you already pay a special tax or assessment to a local fire protection agency. ...

“This new annual fee was imposed by the Legislature (all Democrats in favor, all Republicans opposed) at the request of Gov. Brown. It is being collected by the Board of Equalization and administered by the Department of Forestry and Fire Protection. ... You may have fewer than 30 days to pay. If you are late, there is a 20 percent penalty, plus interest. Every 30 days after that, another 20 percent penalty is added, plus interest. The fee is a lien on your property, and failure to pay can result in foreclosure.”

The HJTA bulletin also notes, “Class action could qualify 825,000 property owners for a fire tax refund. ... To be eligible for a refund, property owners must first pay their bill, then file a protest with the state.”

Moreover, there has been “a disclosure that CAL-FIRE funneled money from wildfire damage settlements into a special account instead of the state treasury. That revelation was followed by an opinion from the Legislature’s legal counsel that the department is improperly using some of the new revenue to collect damages from those who maliciously or accidentally start fires, instead of its intended purpose.”

Hearden also reported, “CAL-FIRE spokesman Daniel Berlant said there was no intent to hide $3.6 million in wildfire settlement money that was placed in an account kept by the California District Attorneys Association. Most of the money was used to buy digital cameras, radio scanners and other equipment and for conferences to train county prosecutors and fire investigators” (emphasis is mine).

Once again, we see that legislators and the state bureaucracy display an attitude that what the public wants doesn’t count, resorting to back-room deals to achieve their objectives.

Furthermore, there are other unfair or unjust consequences of this tax.

For example, the $150 tax is presumably assessed on habitable homes. However, farmers often have many such structures on their property for field hands and their families, and CAL-FIRE has assessed the fire protection fee on all of them, notwithstanding the fact that they are all on the same property.

You can log onto the HJTA website to learn how to protest the fee and obtain the necessary forms.

You will find more information about this issue online at: California Cattlemens Association, the California Farm Bureau Federation, the California Department of Forestry and Fire Protection, state Sen. Ted Gaines and by clicking here.

— Harris Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital. Click here to read previous columns. The opinions expressed are his own.

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