Counties Across the State Forced to Repay Cities Millions after Court Ruling out of LA

California counties came out on the losing side of a legal battle with cities, which means they will have to refund cities across the state millions of dollars after the state’s highest court upheld a ruling stating that counties overcharged property tax administrative fees. The case stemmed from Los Angeles County when 47 cities banded together to challenge improper collection of withholdings. The case has been in court since 2008 and cities have eagerly awaited an answer for years.

Other counties and cities have been waiting for the court’s answer as well to determine whether the county charged property tax administrative fees on education money that is exempt from such fees under state law, as other counties withheld tax dollars in the same manner as LA County. Consequently, refunds are now necessary in light of the court’s ruling. For example, San Mateo County is set to repay its cities roughly $3 million.

The Daily Journal reports: “According Chief Deputy County Counsel Paul Okada, the overall total owed back to the cities is about a half-million dollars a year since 2006, or roughly $3 million. San Mateo County has a good relationship with its cities which is why Fay and Okada said neither side was eager to litigate the issue. Instead, they agreed to wait until after the Southern California case wound its way up to the California Supreme Court which it ultimately did after several flip-flops in lower jurisdictions.  Okada anticipates both sides connecting to pencil out the actual refunds after the holiday season.” See more here.