June 2001
Schools to Partner on Taxes; Delinquent Bill Collections to Supply
New Revenues for Local Districts
Bhavna Mistry, Staff Writer
Several school districts in Los Angeles County are forming a joint
powers authority that will collect penalties and interest from
delinquent property tax bills - money that otherwise would go to the
state.
The Los Angeles, Las Virgenes, Glendale, Long Beach and Downey
Unified School districts will be the founding members of the
authority, collecting revenue from delinquent tax payments - along
with an additional 8 percent, guaranteed.
"Currently the penalties and interest don't help California school
districts, they help the state of California," said Paul Goldfinger, a
spokesman for School Services of California, a company that created
the program and offered it to districts statewide. "This program
guarantees 8 percent of the delinquent property tax amount as
additional funding."
Under the plan, the joint powers authority will purchase delinquent
tax payments from each participating school district. The authority
then will sell them to the National Tax Assistance Corp., which will
collect the delinquent taxes, plus penalties and interest as the
taxpayers make their payments.
The NTAC will pay each school district 100 percent of the amount of
the delinquent property taxes, plus an 8 percent premium.
"There is no risk for the school districts," Goldfinger said. "They
would get the money up front. That's why it's so beneficial."
NTAC will borrow money in advance to pay the district 108 percent
and it will make what it hopes to be a profit from the difference
between the amount it gets and its costs.
While logistics are still being worked out, many of the founding
school districts have begun approving the joint powers authority to
move the process forward.
Other districts in Los Angeles County also have the option of
participating in the agreement.
Hoping to bring the district any additional money it can, the Las
Virgenes Unified school board was one of the first to approve
participation in the so-called "Teeter Plan."
"It's another option to bring revenue to the district," Deputy
Superintendent Don Zimring said. "The amount we get will be from
the delinquent taxes owed within our district. Without this plan the
state would deduct what they normally pay us."
While officials agree that the money will be minimal, they say it's
better than nothing. Last year the 14-school district received $14
million in revenues from state property taxes. If they participate in
the program, they are expected to receive an additional $65,000 to
$70,000.
"It's just taking advantage of existing law that other districts have
been doing for some time," Zimring said. "It's utilizing the system as
best as we can so that we can provide for our students."
Though nearly all surrounding counties currently have similar Teeter
Plans in place, Los Angeles County opted not to participate in such
an agreement and does not receive any money or interest from
delinquent payments.
"L.A. County government has looked at this and found that it doesn't
work for them," Goldfinger said. "They looked at it several years ago
and recently and they continued to reach the decision that it doesn't
make sense to go into the Teeter Plan."
The change in law last year, now allows school district and other
agencies to form joint powers authority and work to capture a portion
of the delinquent tax payments.
Copyright 2001 Tower Media, Inc. The Daily News of Los Angeles
June 10, 2001 Sunday, Valley Edition
Schools to Partner on Taxes; Delinquent Bill Collections to Supply
New Revenues for Local Districts
Bhavna Mistry, Staff Writer
Several school districts in Los Angeles County are forming a joint
powers authority that will collect penalties and interest from
delinquent property tax bills - money that otherwise would go to the
state.
The Los Angeles, Las Virgenes, Glendale, Long Beach and Downey
Unified School districts will be the founding members of the
authority, collecting revenue from delinquent tax payments - along
with an additional 8 percent, guaranteed.
"Currently the penalties and interest don't help California school
districts, they help the state of California," said Paul Goldfinger, a
spokesman for School Services of California, a company that created
the program and offered it to districts statewide. "This program
guarantees 8 percent of the delinquent property tax amount as
additional funding."
Under the plan, the joint powers authority will purchase delinquent
tax payments from each participating school district. The authority
then will sell them to the National Tax Assistance Corp., which will
collect the delinquent taxes, plus penalties and interest as the
taxpayers make their payments.
The NTAC will pay each school district 100 percent of the amount of
the delinquent property taxes, plus an 8 percent premium.
"There is no risk for the school districts," Goldfinger said. "They
would get the money up front. That's why it's so beneficial."
NTAC will borrow money in advance to pay the district 108 percent
and it will make what it hopes to be a profit from the difference
between the amount it gets and its costs.
While logistics are still being worked out, many of the founding
school districts have begun approving the joint powers authority to
move the process forward.
Other districts in Los Angeles County also have the option of
participating in the agreement.
Hoping to bring the district any additional money it can, the Las
Virgenes Unified school board was one of the first to approve
participation in the so-called "Teeter Plan."
"It's another option to bring revenue to the district," Deputy
Superintendent Don Zimring said. "The amount we get will be from
the delinquent taxes owed within our district. Without this plan the
state would deduct what they normally pay us."
While officials agree that the money will be minimal, they say it's
better than nothing. Last year the 14-school district received $14
million in revenues from state property taxes. If they participate in
the program, they are expected to receive an additional $65,000 to
$70,000.
"It's just taking advantage of existing law that other districts have
been doing for some time," Zimring said. "It's utilizing the system as
best as we can so that we can provide for our students."
Though nearly all surrounding counties currently have similar Teeter
Plans in place, Los Angeles County opted not to participate in such
an agreement and does not receive any money or interest from
delinquent payments.
"L.A. County government has looked at this and found that it doesn't
work for them," Goldfinger said. "They looked at it several years ago
and recently and they continued to reach the decision that it doesn't
make sense to go into the Teeter Plan."
The change in law last year, now allows school district and other
agencies to form joint powers authority and work to capture a portion
of the delinquent tax payments.
Copyright 2001 Tower Media, Inc. The Daily News of Los Angeles
June 10, 2001 Sunday, Valley Edition
Last revised 05-27-09
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