This bill authorizes the creation of children’s service districts and provides authority to levy permanent property taxes and other taxes which is unnecessary, duplicative and has the effect of limiting the capacity of existing taxing jurisdictions in meeting their responsibilities.
Adding more taxing districts could lead to compression and those already in compression would see compression increases if children’s districts are created and added to the tax rolls. (Compression is a reduction in taxes that would otherwise be levied but must be reduced due to the 1990 Measure 5 caps of $5 for education and $10 for local government.) According to the Department of Revenue, tax year 2019-20 compression losses totaled about $129 million. Twenty districts, mostly cities and schools, lost more than 10 percent of the taxes that would have otherwise been owed. Seven districts had more than 20 percent of their taxes compressed.
The services authorized under SB 299 are already or can be provided by existing school districts, cities, counties and special districts. The greater of 10% or 100 electors are needed to file a petition for formation. The phenomenon of a maximum property tax levy is that the more services added, the less each service receives.