Larry Ellison, the billionaire head of Oracle Corp., spent at least $200 million to build a house on his 23-acre Silicon Valley estate south of San Francisco.
When San Mateo County tax officials valued the residence, a reproduction of a 16th-century Japanese emperor’s country house, at $166 million, Ellison protested. He argued, through his attorney, that the property was so elaborate no one else would pay that much for it.
After more than two years, Ellison won his case before a county appeals panel, receiving a $3 million tax refund. Now local schools and parents are the ones protesting.
“He’s essentially taking money away from the education of the kids of this county,” said Maren Christensen, 46, parent of a second-grade student at Ormondale school in Portola Valley, California, near the town of Woodside, where Ellison’s estate is located.
The Portola Valley School District estimates it will lose as much as $300,000 from its $10 million budget because of the decision.
“For us, it’s the worst case scenario,” said Tim Hanretty, assistant superintendent. “We’ll survive. This community and school district will rally.”
The school district, with more than 700 students, probably will have to cut six non-teaching jobs from its 120-person staff because of the ruling, Hanretty said.
$25 Billion
Ellison, Oracle’s 63-year-old chief executive officer, is the world’s 14th-richest person, with a net worth of $25 billion, according to Forbes Magazine.
William Bennett, Ellison’s lawyer in the appeal, and Deborah Hellinger, a spokeswoman for Redwood City, California- based Oracle, didn’t return messages seeking comment.
California schools already face budget cuts. Governor Arnold Schwarzenegger earlier this year proposed to trim spending by as much as 10 percent from all state agencies to fill a deficit that reached as high as $16 billion in February, caused by the loss of tax revenue amid the worst housing slump in the U.S. in 26 years.
The state’s top education official said an estimated 20,000 teachers and school support staff may lose their jobs as a result.
In its ruling, the San Mateo county assessment appeals board reduced the taxable value of the property belonging to Ellison by $100 million. After that decision, at the existing rate of 1 percent property tax, Ellison would owe $646,770 for tax year 2005, the year he appealed the value of his home through his Octopus Holdings LP.
Fielding Complaints
“Legally, Larry Ellison had every right to do what he did, but it would have been nice if he considered the impact to the Portola Valley School system,” said Angela Schillace, 40, who has two school-aged children in the area.
The school district is trying to make up for the loss of money by asking a local foundation to donate unallocated funds, leaving some jobs unfilled, and exploring cost-saving measures with other area schools. In addition to state-wide cutbacks, the school will face an increase in the enrollment of kindergarten students next year, requiring more teachers to handle the class load, Hanretty said.
While San Mateo County’s Board of Supervisors is fielding complaints from residents, there’s nothing it can do, said Bill Chiang, a spokesman for its president, Adrienne J. Tissier. “This whole thing has little to do with the board,” he said. “It’s not something we allow or don’t allow.”
Residents have called expressing emotions ranging from “upset to outrage,” said Richard Gordon, a member of the board of supervisors.
“Perhaps Mr. Ellison would like to be directed to one of the school foundations” to make a donation, Gordon said.