Federal tax plan will hurt SLO County homeowners, Supervisor Arnold tells White House

San Luis Obispo County Supervisor Debbie Arnold told White House officials this month that county residents could be hurt by a federal tax overhaul that might eliminate state- and local-tax deductions and cap mortgage-interest deductions.

“Property values in this state are high and the property taxes are therefore high. Those deductions could be the difference in someone being able to afford their home or not,” Arnold said in an interview with The Tribune on Nov. 20.

Arnold, a conservative who represents North County, was one of a handful of elected officials from California who attended a meeting of local elected officials nationwide in Washington, D.C., on Nov. 16 to discuss the tax plan with influential leaders, including Vice President Mike Pence.

When she was invited, she was told the office was interested in hearing from officials representing communities from California, New York and New Jersey where real estate mortgages and local and state taxes are typically higher than the rest of the country.

The House adopted its version of the tax plan the day Arnold and about 125 other officials met for the White House’s State and Local Government Tax Reform and Economic Competitiveness Discussion.

That plan limits the mortgage-interest deduction to the first $500,000 in principal, which could be a problem for residents in San Luis Obispo County where the median home price is $550,000. The Senate has indicated its plan would keep the mortgage-interest deduction that applies to the first $1 million in principal, and said the final tax plan could look different.

Arnold said she neither supports nor opposes the tax plan, pending further analysis, including the impact of potentially doubling the standard deduction.

“They were telling us this is meant to be looked at comprehensively,” Arnold said. “I haven’t seen any analysis if the good parts outweigh the bad parts.”

Other issues she raised that could impact the county include the possible elimination of tax-exempt private activity bonds and elimination of advance refunding bonds, which the county took advantage of in 2015. That resulted in a gross cash savings of more than $12.7 million to San Luis Obispo, Templeton and Paso Robles water ratepayers, according to county auditor Jim Erb.

Arnold will be reimbursed about $1,700 from the county for airfare and her hotel stay. She said she attended the D.C. meeting instead of the state Association of Counties annual meeting in Sacramento later this month.

This story was originally published November 20, 2017 at 6:23 PM with the headline "Federal tax plan will hurt SLO County homeowners, Supervisor Arnold tells White House."