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June 03, 2005

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Publication Date: Friday, June 03, 2005

Challenge to local tax getting serious Challenge to local tax getting serious (June 03, 2005)

The future of El Camino Hospital's $148 million bond issue, as well as a $1.5 million-a-year parcel tax for the Mountain View-Whisman school district, is in limbo, caught in a nuisance lawsuit by a Saratoga attorney who doesn't like to pay local property taxes.

Unlike 70 percent of Mountain View voters who approved the school parcel tax, or the equal amount who backed the hospital bonds, property owner Aaron Katz sees these community obligations in a different light entirely. Katz, who with his partners owns 10 apartment units in Mountain View and could not vote on the tax measures because he is not a local resident, sees only an unfair tax imposed on him without his consent.

Unfortunately for the hospital and the school district, Santa Clara Superior Court Judge Kevin McKenney has given Katz plenty of room to maneuver since the initial filing last year against Mountain View-Whisman. Last week, when he was widely expected to throw out Katz's challenge, Judge McKenney instead said he will hear arguments in the case starting later this month.

Attorneys for the two districts, as well as those for the West Valley-Mission Community College and Campbell Union high school districts, whose tax votes Katz also is challenging, now must continue to wait for a decision, although both sides have said they will appeal regardless of how Judge McKenney rules.

And that is most worrisome for the hospital district, where vice president Jon Friedenberg said last week that any challenge of the vote that is not resolved could halt sale of the bonds, which in turn could seriously disrupt the hospital's timetable to begin construction this fall.

Virtually every public official asked to comment about the Katz challenge has said that it is without merit and should be thrown out. But at least the first round will be up to Judge McKenney, and if the case advances it will continue to threaten the parcel taxes and bond issues anywhere in the state, even if they are passed by two-thirds or more residents.

It is difficult to believe that one disgruntled taxpayer, who happens to be a lawyer, can disrupt a taxing option which was thought to be firmly grounded in state law. The only hope now is for Judge McKenney to throw out the Katz case with a substantive ruling. Barring that, it is likely that the issue will continue to grind its way through the courts, leaving local projects in limbo and casting a very long shadow over future elections in other jurisdictions.

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