IVCSD Board Tables Discussion on Non-Profit Tax Exemption to February

Image Courtesy of Nick Youngson | Alpha Stock Images

Alondra Sierra
Isla Vista Beat Reporter

Discord remains within the Isla Vista Community Services District (IVCSD) board over whether to grant tax exempt status to non-profit housing providers.

After Measure R was passed in June to provide funds for the IVCSD, residents were left under the impression that there would be a tax reduction on the User Utility Tax (UUT) for low-income residents who could not afford the measure’s eight percent tax increase.

The district, however, has yet to decide on whether or not to grant non-profit housing providers an exemption.

“We received a lot of feedback about people being disappointed that there wasn’t a certain decision made,” said IVCSD board president Ethan Bertrand. After two weeks of disagreement, Bertrand motioned to table the discussion for February 2019.

During the board meeting on Oct. 30, directors Jay Freeman and Robert Geis were concerned with the unfairness of the tax relief if applied to certain groups, as it would give special treatment to particular community members and upset those not exempted.

Residents of Pescadero Lofts, for example, already expressed their desire to be included in the tax exemption, according to board director Father Jon Hedges. The apartments currently house many of Isla Vista’s former homeless.

“Pescadero Lofts is the lowest of the lower income in our community,” Hedges said. “[They] felt like they were being excluded from representation in this [tax exemption].”

The non-profit tax exemption in discussion, however, would apply to non-profit housing providers in Isla Vista, comprising of Friendship Manor and Santa Barbara Housing Co-Op — including Newman, Merton, Biko, Manley, and Dashain houses.

IVCSD conducted an analysis on the annual utility tax revenue coming from each non-profit housing provider. Calculating gas, water, sewage, and trash, the tax revenue from both Friendship Manor and the five SB Housing Co-Ops totals to around $25,000.

Exempting taxes from non-profit housing would mean that the district would cut about three percent of the $777,000 estimated funds from their main source of funding, utility user taxes.

For residents of Friendship Manor, the board’s lack of a clear answer to the exemption means residents would endure a rent increase that is applied at least until the board decides on whether or not to create a tax relief.

“The average income of our residents is $1200 a month, so a $10 a month hit is impactful,” said Eva Cherantalk, board member at Friendship Manor.

Cherantalk told the board that she was under the impression that nonprofits would be exempted, as were a number of other individuals who contacted the board in response to Measure R, Bertrand said during the board meeting on Oct. 30th.

“I’m actually very disappointed to the extent that I’m hearing that there were people campaigning on behalf of [Measure R], telling people that they would get exemptions,” director Freeman said.

Bertrand, general manager Jonathan Abboud, and secretary of the board Spencer Brandt were involved with the “Yes on Measure R” campaign. Nearing election day, campaign members and media outlets reported on a possible tax exemption program for low-income residents if the measure was passed.

“Although I am supportive of this type of proposal, I will say that I am shocked that any non-profit housing provider would say that there was any assertion by people who were involved with the passage of Measure R, that there would be a non-profit exemption from the get-go,” Bertrand said.

With the new year just around the corner, non-profit housing providers are looking for a definite yes or no on the tax exemption in order to plan out their fiscal year. As of now, the discussion remains on the table for February.