By Eliza Ridgeway

The coffers of Los Altos Hills are set to swell this year, and for many years to come, thanks to the success of Assembly Bill 117, which will redirect nearly $400,000 of funding to the city every year. The state Senate passed the bill and the governor signed it last Thursday.

AB 117 focuses on four cities in Santa Clara County - Los Altos Hills, Saratoga, Monte Sereno and Cupertino - that each received about 4 percent of the property tax collected from their communities, while other California cities receive about 7 percent. Based on an agreement signed in 1987, those four cities received a smaller proportional return because they were unique in not having to support the county court system.

“At that time they came out even,” said Santa Clara County Supervisor Liz Kniss, who worked on the bill with other supervisors and local mayors. “But as the years went by and formulas changed, it didn’t make sense any longer.”

“This is just fabulous,” said Los Altos Hills City Councilman Breene Kerr, , one of several council members to work on AB 117. “While (the bill) directly increases revenues to the town, it doesn’t raise taxes for residents of LAH by one cent. This was money that was rightfully due the town.”

Changing the county’s formula meant reducing funding for the county by roughly $1.4 million every year. Proposed changes to the formula had failed on the regional level twice before because of that cost, Kniss said.

AB 117, also known as the tax equity act, passed this time in part thanks to some quid pro quo negotiating between the cities and the county. Los Altos Hills, for example, agreed to actively pursue annexation of unincorporated pockets around town.

“The great thing about this is that this is incremental dollars that come in to the town each and every year from now going forward,” Kerr said.

He said that the town would ultimately have public hearings to explore options for use of the increased funding, particularly the possibility of developing a town park and soccer field.