Santa Clarita's West Side Revenues Used to Fill County Coffers

A new study conducted by Applied Economics has shown that the unincorporated areas to the west of the City of Santa Clarita (otherwise known as the West Side) are paying taxes to Los Angeles County far in excess of what they're receiving as benefits.

Funds collected from the West Side and other unincorporated areas of Santa Clarita in the form of property tax, sales tax and the utility users tax amount to about $42 million per year, yet that same area only receives about $21 million in municipal services from the County.

So where does all this money go? Nobody seems to know! The County is not required or obligated to account for the revenues it receives from a particular area, nor is it required to "pay back" those revenues to the area in one form or another.

Even if the West Side were to incorporate into its own city, any surplus revenues would not be given back to them. This is due to a statewide "revenue neutrality" rule that was instituted in 1992. Since that time, there have been no new cities incorporated in California, which is not a big surprise.

The catch here is that the annexation process apparently avoids this "revenue neutrality" rule. When an area is annexed into an existing city, that city gets to keep all of the sales tax revenue and a portion of the property tax revenue generated by that area.

The City of Santa Clarita reportedly spends all of its revenues locally within the City limits, although they may not all get spent in exactly the area they were collected from. Still, that's $20 million that can be spent to improve our local environment instead of going to Never Never Land in the County's coffers.

Given these rules, it's in the County's best interests if an area incorporates into a new city rather than being annexed, because then the County gets to retain all of the surplus revenues. Is it any big surprise then that Supervisor Antonovich anteed up $25k for the preliminary cityhood study for the West Side, and also paid the fees for the members of the West Ranch and Castaic Town Councils to take cityhood classes in Sacramento? What's $25k plus a few hundred in class fees compared to a whopping $20 million surplus kitty?

Considering that we have some Stevenson Ranch parents up in arms because their taxes are funding some of the education costs for Castaic area high school students attending West Ranch High, that's just chump change compared to what the County is doing with their tax dollars. Seems we need a change of focus here!