MANSION OR COTTAGE, $50 FLAT TAX SOUGHT FOR SCHOOLS.

Byline: HARRISON SHEPPARD Sacramento Bureau

SACRAMENTO -- Every property owner in California, no matter how big or small or valuable their parcel, faces paying a flat $50 tax to fund schools under a measure voters will be asked to approve in November.

Although it's still early in the election season, the move already is generating criticism from taxpayer groups and property owners who say it would be a regressive tax that would add to the burden of average citizens who are already overtaxed.

Proponents of Proposition 88 -- authored by EdVoice, a coalition that includes backing from such wealthy philanthropists as Netflix CEO Reed Hastings, Silicon Valley investor John Doerr and SunAmerica Chairman Eli Broad -- say the state's schools are in dire need.

But critics note the measure places the same tax on a small one-bedroom home in Reseda as it does on a mansion in Bel-Air or massive farm in the Central Valley.

``I think it's going to look foolish to have the two primary proponents, Reed Hastings, the owner of Netflix, and John Doerr, another Silicon Valley billionaire, impose a tax on everyone else that hits their multimillion-dollar mansions the same as a struggling family,'' said Jon Coupal, president of the Howard Jarvis Taxpayers Association.

``I'm not sure they have completely thought through how that's going to be perceived.''

The measure would generate about $500 million by placing a $50 tax on every property in the state. The funds would go to specific K-12 education purposes, including class-size reduction, textbooks and school safety, plus facilities money for schools that have not received state bond funds.

``Californians want better schools,'' said Paul Mitchell, political director of EdVoice. ``They're very optimistic, they're hopeful, but they also don't want to spend money on things where they think there might be waste. This is written so it ensures dollars go straight to the classroom.''

The funds would come on top of a 2006-07 state budget that already calls for spending $55 billion on education, an increase of $3 billion from the previous year. Additionally, the November ballot has a $10.4 billion bond measure for school facilities.

State Superintendent of Public Instruction Jack O'Connell, who supports Proposition 88, said the needs still far outweigh the available funding.

``The needs are critical,'' he said. ``Public education today is still underfunded. In terms of dollars on the per capita basis, we lag behind all but half a dozen states.

``Is it a panacea? No. Will it help, will it make a difference in students' educational opportunities? The answer is definitely yes. It's an opportunity to provide additional resources in the classroom.''

Mitchell said proponents decided to go with a flat fee rather than one tied to property values because they did not want a tax that increases as values rise.

They chose $50 because they felt it was small enough to not cause financial hardship or have a substantial impact on a person's decision to buy a property.

But the measure has another quirk that could place a proportionally higher burden on timeshare owners.

Depending on local county tax laws, every individual owner of a timeshare could have to pay the $50, meaning a single unit could be taxed up to 52 times.

The timeshare provision varies according to an individual county's tax policies, according to officials in the timeshare industry.

If the county sends separate tax bills to each individual owner of a timeshare, those individuals are likely to each have to pay $50.

But if the county sends a single bill to the timeshare association or management company, which typically then sends its own bills to the individual owner, it is more likely they would only have to split a single $50 payment among all the owners.

That means in some counties, if a timeshare is divided among 52 weekly owners, the total new tax bill on that unit would amount to $2,600. In other counties, it would total $50.

``It's very concerning because timeshare is a vital part of the California tourism economy and one that has been continuing to grow in recent years,'' said Jason Gamel, vice president of the Washington-based American Resort Development Association, which represents the timeshare industry.

``It could be detrimental to the timeshare industry and to residents of California.''

California has about 12,000 timeshare units, generating at least $3 billion in direct and indirect economic impact, including $418 million in tax revenue, according to an ARDA study.

Most of them are concentrated in San Diego, Riverside County, Anaheim, Big Bear, Mammoth, Carmel and San Francisco.

The national median cost of a one-week share of a two-bedroom timeshare is about $17,000.

Mitchell said proponents are still researching the accuracy of the claims about the effect on timeshares, but agreed it is likely to vary by county.

Still, he added, ``I don't think timeshare owners are more important than class-size reduction and kids.''

harrison.sheppard(at)dailynews.com

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