Citizens Ass'n v. Orange County Local Agency Formation Commission

*1185 Opinion

I. INTRODUCTION

Taxpayers living in Huntington Beach have been paying two taxes which taxpayers in next-door Sunset Beach haven’t. First, Huntington Beach taxpayers have been paying a utility tax of 5 percent. Second, they have been paying a “retirement property tax” of about $15 per each $100,000 of assessed valuation, on top of Proposition 13’s 1 percent limit, for Huntington Beach pension costs incurred prior to the passage of Proposition 13 in 1978.

Until now the taxpayers of Sunset Beach have been spared those taxes. Sunset Beach is a relatively small strip of land, consisting of about 133 acres, which, for over a century, has been an unincorporated part of the County of Orange. Because of this small size, Huntington Beach was able, with the approval of the Orange County Local Agency Formation Commission (OC LAFCO), to annex Sunset Beach without a vote under California’s “island annexation” statute. (See Gov. Code, § 5637S.3. 2 )

Another California statute provides that any territory annexed to a city shall be subject to that city’s previously authorized taxes. (§ 57330.) So, with the annexation, Sunset Beach residents have now found themselves subject to…