Property tax roll falls for first time in decades.

Foreclosures, reassessments get blame for drop

While some county employees are breathing a sigh of relief that Gov. Pete Wilson signed a bill enabling them to keep pace with the growing number of property tax assessment appeals, the result of all those property value reductions remains ominous - for the first time in 22 years, L.A. County's tax roll is declining.

L.A. County Assessor Ken Hahn reported last week that the county's 1995-96 assessment roll plummeted by $10.2 billion, or about 2 percent, to $486.8 billion. Since the tax roll is the basis for property tax revenues, those too will decline here for the first time in nearly a quarter-century.

Although automatic inflation adjustments usually more than offset property value declines, record numbers of people are now requesting value reductions and/or appealing their assessed valuations.

In fact, at one point recently the county was so far behind in processing the appeals that it was at risk of having to automatically grant some 1993 reassessment appeals because of a two-year time limit on hearing them. As a temporary answer, the county set time limits for appeal hearings. Those limits expire next month.

"We're starting on the 1994 (appeals) and we have more than we had when we had the problem with 1993, and we anticipate even more in 1995," explained Georgette Dame, senior executive officer of assessment appeals.

Authority increased

So late last month, Wilson signed a bill that will, among other things, give the assessor more authority to correct the rolls himself.

But Hahn claimed last week that his office is so overworked already that he has been unable to add to the rolls some $3 billion in Northridge earthquake restoration and $1.4 billion in new construction.

"The unenrolled value would have produced nearly $44 million to cash-strapped jurisdictions - the county's share being nearly $10.1 million," said Hahn. "My department has sustained $15 million in budget cuts over the past three years; the sponge is wrung out."

The new legislation also allows the county to add more appeals boards, but Dame said that too costs money.

"At least we have a lot more options this way," she said. "Our hands aren't tied behind our backs like before. I'm keeping my fingers crossed through."

Foreclosures zoom

Another factor contributing to the decline in the tax roll, according to Hahn, is the record number of foreclosures in L.A. County. Foreclosures increased to a record high of 33,963 - a 14 percent increase over last year's total of 29,698 - and represented 18 percent of all reappraisable transfers, Hahn.

He added that although the number of properties changing hands - another occurrence that triggers reassessment - is on the increase, the "added value for each transfer continued to decline."

"This is a marked change from the 1980s when both the number of sales and sale prices were spiking upward," Hahn observed.

Assessed valuations in the City of Los Angeles declined 4.3 percent to $197.8 billion, due to declining property values and "misfortune or calamities," which includes Metro Rail construction damage.

Other areas of the county where steep declines were reported include the South Bay and Beverly Hills.