Fire District Admits Tax Was Illegal, but Isn’t Issuing Full Refunds

The Sacramento Metropolitan Fire District recently sent letters to 3,841 property owners notifying them that it has been imposing a tax (the Sloughhouse/Rancho Murieta Special Fire Tax) on their properties even though they are not in the district, and thus do not owe the tax.

“Our review determined that the Special Fire Tax has been levied on some parcels near to, but not located within the boundary of the special tax area, and as a result, the Special Fire Tax no longer appears on your Sacramento County Secured Property Tax Bill,” the fire district said in a letter to the affected property owners.

The letter continued: “In addition, Metro Fire will provide a refund of $100 per year to property owners of the above-mentioned parcels who paid the Special Fire Tax for tax years 2009/10, 2010/11, 2011/12 or 2012/13. Enclosed with this letter is an application and instructions to apply for a refund if you so choose.”

Kurtis Ming, an investigative reporter for CBS13 in Sacramento, noted in a March 4 television news report: “Metro Fire’s letter didn’t mention the agency’s erroneous tax actually began in 2005. The agency said it will not return the $1.3 million it wrongly collected during those earlier years. In total, the agency collected a total of $3.01 million from taxpayers it never should have taxed.”

Mr. Ming reported that Metro Fire Deputy Chief Chris Holbrook said the agency would like to return the $3 million it wrongly collected, but claims its hands are tied. “Per legal counsel, the limitations on that was four years that we could refund,” Mr. Holbook said, adding that he thinks this is “unfortunate.”

Professor John Sims of Pacific McGeorge School of Law said the district is wrong. He said the law cited by the district says courts cannot force a public agency to pay back taxes collected beyond four years, and added, “That’s not the same thing as saying they’re not allowed to pay. … It’s not really ‘unfortunate’ for them if it’s their choice not to make the payments.”

In addition to forcing taxpayers to apply for refunds rather than sending refunds proactively, and then only refunding a portion of the money that was collected illegally, the district apparently has opted not to pay interest on the money it illegally collected and held for several years. (Sources: CBS13 News, March 4; Letter from the Sacramento Metropolitan Fire District, December 2013.)

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