T

Congress is currently considering legislation (H.R. 3221) that would penalize taxpayers who vote to approve local school facilities bonds and (possibly) school parcel taxes.  Called the Foreclosure Prevention Act of 2008, this bill attempts to address the housing and foreclosure crisis.  However, one provision in this bill provides that taxpayers in a local jurisdiction (such as a school district) that raises the property taxes between April 2008 and January 2009 would not be able to claim the standard property tax deduction on their federal income tax returns. 

Many California taxpayers would be negatively affected by this provision, because they live in districts that approved local school facilities bonds in June.  Bond measures scheduled for the November ballot would also be affected.

While CSBA appreciates the attempt to address the housing crisis, this is another example of Congress imposing a “solution” at the expense of local governments, including school districts.  This provision is an unwarranted federal intrusion into local government decision-making that would (1) penalize taxpayers for voting to support their local schools and (2) set a bad precedent allowing the federal government to interfere with local government finance.

The Senate is scheduled to vote on H.R. 3221 next week.  Please take a few minutes of your time to write or call Senators Boxer and Feinstein this week to oppose this bill.  For your convenience, a sample letter is below.

If you have questions regarding the content of this action alert, please contact either Erika Hoffman, Pr. Legislative Advocate, ehoffman@csba.org or Marites Ares, Legislative Analyst, mares@csba.org.