The Santa Clara County Board of Supervisors voted 4-1 on Feb. 28 to support a tax equity allocation (TEA) bill for those cities. The bill, Assembly Bill 117, now has to be passed by a two-thirds vote in the state Legislature and signed by the governor. Supervisor Peter McHugh voted against the allocation.

"This is wonderful news," said Carol Atwood, Cupertino's director of finances, estimating the city could receive about $3 million if the allocation is approved by the state Legislature.

"This is a historic change for Cupertino," Mayor Richard Lowenthal said. "It raises our property tax return by 75 percent."

The four cities currently receive the least amount of return from their property taxes in California--just 4 percent of their property taxes from the state compared to a statewide standard of 7 percent.

"It dates back to Proposition 13 when taxes were frozen at their current levels," Atwood said. When the proposition passed in 1978, Cupertino and the other communities had below-average property tax rates. "Another bill requested by state Sen. John Vasconellos lowered the taxes for us to [about half of the 7 percent]."

In the 1980s, Santa Clara County used the four cities' property tax sums to help fund municipal courts.

"The [municipal] trial courts are no longer used, so it didn't make much sense for it to continue," said Lowenthal, who represented Cupertino in negotiations with the county.

In exchange for the county's support of tax equity allocation, each of the four cities now has to actively pursue annexation of county pockets of land within their communities. The annexation would help the county reduce costs and lessen the effect of its lost property tax revenue, estimated

ed to be more than $4 million.

"Cupertino has embraced annexation in the last five years and been sort of the poster boy," Atwood said, pointing to the acquisition of Rancho Rinconada and Monta Vista. (The Creston neighborhood bordering Foothill Expressway and Highway 85 is the largest county pocket of land remaining in Cupertino.)

Lowenthal also said Cupertino has been active in annexation efforts.

"The [Board of Supervisors] praised Cupertino for its aggressive efforts in annexation and encouraged the other cities to do the same," Lowenthal said. Lowenthal also encouraged individuals to let the state legislature know of their support for the bill.

In Cupertino, the additional revenue from property taxes would help Cupertino's slowly rebounding finances. "We're doing better and revenue is increasing after the recent economic downturn," Atwood said, while adding additional funding would help the city weather future recessions.

"It's important we get made whole again," she said.