Senate Bill 2, the “Building Home and Jobs Act,” the latest in five years of legislative attempts to impose a $75 to $225 tax on recorded documents, is opposed by California’s County Recorders and by most taxpayers willing to explore the bill and its ramifications.
Apparently, a number of California legislators have found the bill unappealing as well, as the legislation seems to have foundered in the State Assembly. But refusing to give up on a potential tax increase, several Assembly members have spent the last several weeks hacking, stitching, stretching and prodding in a last minute effort to summon the bill back to life.
What backers have created with their efforts is not pretty, but an ungainly shambling monster with loose and mismatched parts that don’t make much sense to those daring to investigate.
Senate Bill 2 is a purported attempt to resolve the state’s affordable housing crisis by collecting an additional $75 to $225 “fee” on recorded documents. This latest version of the tax proposal exempts transfer documents, thereby eliminating the opposition of many in the real estate industry and also relieving many of the wealthy from this new tax burden.
The regressive nature of the tax apparently made the bill unpassable in the Assembly, but now, Assembly Bill 166, legislation originally dealing with safe drinking water, has been gutted and amended to enable property owners to obtain a refund of the tax by signing a document claiming “financial hardship.” (Raise your hand, please.)
Financial hardship is a relative term, which SB2 seems to interpret loosely, since the bill proposes housing aid to those making up to “150 percent of the area median income in high cost areas.” (Though I’m sorry, Kern County, you don’t qualify.)
Other recent amendments and enticements in the bill return a large percentage of the new taxes back to the counties to assist those “experiencing or at risk of homelessness.”
So why oppose a bill that exempts most and benefits almost anyone? Assembly Bill 166, the hardship refund, will apply only to documents related to refinance and leaves behind the hard pressed taxpayers recording documents like an Affidavit of Death, or Mechanic’s Lien. Additionally, the refund will either go to all or create an administrative nightmare, impossible to enforce without collecting income tax data, thereby altering the mission of the Recorder’s Office.
Worse, if passed, SB2 would achieve one long-term goal of many in state government: It gets the Legislature’s hand into the County Recorder’s till, and hence into the taxpayer’s pocket.
If SB2 passes don’t expect the need for new recorder “fees” to end here. Crises ye shall have always, and who’s to say new recorder fees can’t be used to remedy other problems – high college tuition, global warming, Dutch Elm Disease.
New taxes are a bad idea. Letting the Legislature get its hands on recorder’s fees is a worse idea. Please stop this monster once and for all.
Jon Lifquist is the Kern County Assessor and Recorder.