Recently there have been a number of editorials and letters to the editor regarding the potential annexation into the Chumash reservation of 1,400 acres located near the intersection of Highways 246 and 154.
I would like to expand on my comments from last spring regarding this potential annexation and the impacts it would have on our county.
When land is annexed in a “fee to trust” process, it is taken entirely out of county jurisdiction in perpetuity and added to the reservation of the tribal applicant. If their application is successful, the Chumash would take the 1,400 acres out of the county’s land use jurisdiction and it would become totally exempt from paying any property, sales or transient occupancy tax that might be generated from future development of the property.
As these taxes are the primary sources of revenue for our county’s general fund and for our schools, it is important to understand the potential loss of funding to our educational system, public safety and social services.
In 2005, the county did an analysis of the potential loss of property tax revenue if the Chumash were successful in annexing a 6.9-acre parcel and developing it. The result was that the loss of property taxes in the first 10 years would be $5.6 million, and at the end of 50 years would total $42.9 million.
The tribe has stated that they want to build homes on the property for their tribal members. Some community members believe that this type of development will bring needed jobs to our community.
I believe we need to weigh the long-term consequences with the short-term gains if these homes are built on property taken into trust by the Chumash and no longer under the county’s jurisdiction.
Assuming 140 homes valued at $1 million each, with a 1.2-percent tax rate the first year and a 2-percent tax rate increase in subsequent years, the loss of property tax would be approximately $1.7 million the first year, $19 million over 10 years and $150 million after 50 years.
Depending upon the size of the lots, these homes might only take up 10-20 percent of the property, leaving the balance open to other uses or more development in the future, which also would not generate any tax revenue for the county.
In 2004, there was a development proposal for the property that included a 300-room hotel, a golf course, an equestrian center, 275 homes and associated infrastructure, which would probably take up about half of the property.
If such a project were built and valued at $415 million, then, using the same property-tax rate assumptions as before, the loss of property taxes could be $55 million in 10 years and $450 million in 50 years.
And this doesn’t include the loss of tax revenue from any sales tax and transient occupancy tax that the project might also generate.
As you can see, these numbers are staggering, and only estimate out 50 years, although the property would be off the tax rolls in perpetuity.
But what is even more concerning to me is the impact this revenue loss would have on our already strained school budgets, the decline in funding for police and fire services, and the further loss of social services for our most needy residents.
It is for these reasons that I am strongly suggesting again that the tribe not pursue a fee-to-trust application.
Instead, I would ask that they make an application to the county’s Planning and Development Department for whatever they see as the housing needs for their tribal members.
Doreen Farr represents the 3rd District on the Santa Barbara County Board of Supervisors. She can be reached at dfarr@ countyofsb.org.