Refunds must come from city, not taxpayers

DANETTE GOULET

The city has lost yet another lawsuit.

While that comes as a surprise to no one, I’m sure, this loss

could actually benefit the residents of Huntington Beach. The city

has been ordered to pay back taxes it collected illegally from

homeowners for years to pay for inflated employee pensions.

Excellent. It only took a four-year legal battle to convince the

city it should give back the money it took from residents illegally.

It makes your confidence soar in the strong moral fiber of the city,

not to mention the ability of the city attorneys, doesn’t it?

In 1999, two residents and the Howard Jarvis Taxpayers Assn. sued

the city for its practice of collecting a tax that violated the

Proposition 13, the 1978 initiative that reduced local property taxes

by setting a cap of 1% of assessed value.

The city charged an additional 0.5% “override” tax to pay for

benefits for its employees. City officials argued that the city’s

charter, which was amended at the same time as the Proposition 13

vote to allow taxes to meet city retirement system obligations, gave

them the power to apply the money toward employee pensions.

A judge sided with the taxpayers’ association in 2001, and an

appeals court upheld that decision last week.

So now, the city “has agreed” to pay back taxpayers -- not for the

entire time taxes were collected illegally, mind you, but just the

years required by law.

But wait, the suggestion is to pay it back through a general bond

fund. Isn’t that kind of like the taxpayers taking out a loan to pay

themselves back?

How about sending the money back to residents, not with more money

from residents, but from the bloated pensions the city pays its

employees.

Just months before the Howard Jarvis Taxpayers Assn., on behalf of

residents Chuck Scheid and Charles Davis, filed the lawsuit, the city

settled a multimillion-dollar lawsuit involving salary “spiking” by

city employees to artificially inflate their pensions.

So, to make matter worse, the city illegally collected money from

residents to pay for huge pensions that were also illegal.

The money was taken illegally from taxpayers and given to retired

employees, and that is where the money should come from.

How about the intrepid former City Atty. Gail Hutton forking over

some of her $100,000-a-year pension? How about current employees

start paying into their cushy benefits plans, like most every working

person does?

This money needs to come from where it went and shouldn’t add

another burden to taxpayers.

Taxpayers have waited this long, I’m sure they don’t mind waiting

a bit longer while the city figures out how to pay them back without

charging residents for it.

* DANETTE GOULET is the city editor. She can be reached at (714)

965-7170 or by e-mail at danette.goulet@ latimes.com.