Tax lawsuit to go forward

Eron Ben-Yehuda

HUNTINGTON BEACH -- A lawsuit claiming that the city is charging

residents an illegal tax is still headed to trial, despite city attempts

to derail it.

A court last week rejected the city’s argument to throw out the case,

brought by the Howard Jarvis Taxpayer’s Assn. on behalf of the late

Charles Davis and Chuck Scheid.

The suit alleges that without voter approval, the law prohibits the city

from taxing property owners to pay for certain city employee benefits

that were not agreed to before the 1978 passage of Proposition 13,

championed by the late Howard Jarvis.

But city officials argue that the city’s charter permits them to apply

the tax collected for such things as retirement benefits without putting

it to a vote. The city will collect about $7 million this year from the

tax.

The suit, filed Dec. 27, demands refunds from the city for the tax, which

is based on a percentage of the assessed value of a property.

The late Charles Davis was suing for $122.42, while resident Chuck Scheid

is demanding the return of $22.55. Davis has since been dropped from the

suit.

The amounts may seem small, but Scheid has said the principle is more

important than the money.

At a hearing last Thursday, Orange County Superior Court Judge Eileen C.

Moore dismissed the city’s argument that the Jarvis organization doesn’t

fit the legal definition of a taxpayer and therefore couldn’t file suit.

The city also argued that the refunds were demanded too soon, but the

judge simply gave Scheid a chance to refile at a later date.

Although obviously pleased with the judge’s decision, Scheid said he

recognized that “it’s just the first shot in the battle.”

A trial isn’t expected before the end of the year.

The attorney for the taxpayer’s association, Tim Bittle, referred to the

city’s arguments so far as “dirty tricks.”

“I think the city is going to do whatever it can to prevent the case from

being heard on its merits,” he said.

The city is “perfectly prepared” to defend itself, Deputy City Atty.

Scott Field responded.

“We are confident when the court considers all the facts that it will

agree that the city properly set the tax,” he said.