Santa Clara County Schools May Be On Hook For 49ers Tax Rebate
SANTA CLARA (KPIX 5) -- The Santa Clara Unified School District is responding to revelations that it is bearing the largest financial burden of any agency or organization in the wake of a lawsuit to overturn a multi-million dollar property tax refund and tax cut for the 49ers.
According to the lawsuit filed Monday in Santa Clara County Superior Court by tax assessor Larry Stone, SCUSD will have to pay the team a single payment of $13 million in a retroactive tax refund, and then $2.5 million going forward.
"Certainly, $13 million is a lot of money. We want to make best use of the funds that are given to us and to put those resources in the classroom. And so while we didn't have to make cuts this current year, that's $13 million that we're not able to spend towards student education," said Eric Dill, the district's Chief Business Officer.
Stone sued the Appeals Assessment Board, and named the 49ers as a respondent, over the board's November 2018 ruling that determined the 49ers were only responsible for 50% of property tax bill for the $1.2 billion Levi's Stadium, retroactive to August 2014. That resulted in an immediate $36 million refund, as well as $6 million tax cut every year going forward.
Stone said the 49ers appealed the tax bill last year on the basis that the NFL season is only six months long. However, non football events such as concerts, soccer games, and private corporate events, are authorized and managed by the 49ers.
"They occupy that stadium year-round. They had control over many parts of the stadium and also activities that can be used in the offseason year round. They receive a benefit from that stadium 12 months out of the year. So we really need to look at what the value is in total that the 49ers receive from occupying that public property, and not the length of the NFL season," said Dill.
According to the lawsuit, here is the breakdown of the share of the financial burden to repay the 49ers' property tax refund:
40% Santa Clara Unified School District
18% Santa Clara County
15% Local Education Fund
11% West Valley-Mission Community College District
10% City of Santa Clara
4% County Office of Education
2% Local water district
"We're building our budget this year. We're having to factor in that loss of about $2.5 million in tax money from the 49ers ongoing. And so it's retained our thinking and how we might make use of our resources. It's causing us to think about scaling back in areas that otherwise we might want to augment or supplement in future years," said Dill
The district had considered filing the lawsuit itself, but state law only allows the tax assessor to do so, said Dill. The district will file an amicus brief to the court, in support of the county's suit.
SCUSD has not yet made any payments, and instead will wait for instructions from the court as the case progresses. Dill said the district is on "solid financial ground", and that no cuts were implemented this year. Also, no district resources have been identified as targets for future cuts in the event a repayment to the 49ers.
"It's just holding us back from doing more. And if I were to make an analogy, a $2.5 million loss is about what we spend on Chromebooks for students this year. So if we thought about a refreshment cycle for Chromebooks, it would be about equal to what we lost from the 49ers," said Dill, "It's just merely disappointing that we have to adjust our revenue projections and have less to spend towards the education of our amazing students."
The 49ers did not respond to a request for comment today. Yesterday, the team released a brief statement: "We are aware of the assessor's decision to appeal the independent appeals board's decision regarding possessory interest tax."