Another Taxing Situation in Bell, Calif.

Less than two months after residents of Bell, Calif., learned that city leaders were earning salaries grossly out of proportion to the earnings of leaders in cities of similar size, state officials now say that residents were also illegally overtaxed.

Collectively, the California state controller says, Bell's nearly 40,000 residents have overpaid by almost $3 million since 2007.

The reason: A vote by the Bell City Council that year to increase property taxes in order to meet pension obligations was in violation of state law. California cities are prohibited from raising the tax rate for pension purposes beyond the rate imposed by the state for fiscal year 1983-84.

The property tax situation is adding insult to injury for already flabbergasted taxpayers. Earlier this summer, it was reported that Bell's city administrative officer was earning nearly $800,000 annually. Meanwhile salaries for most city council members reached about $100,000, even though the jobs are part time.

Since then, three city officials resigned amid angry protests. But revelations of questionable city management continue to unfold.

Now, in a letter to Los Angeles County officials, state Controller John Chiang said Bell's property tax rate must be lowered to meet state requirements. For the owner of a home worth $275,000, the change will yield about $250 in savings annually.

But taxpayers are likely out of luck when it comes to the overpaid taxes from past years. That's because state law requires overpayments to be allocated to area schools.

"We were taken advantage of," says Rodrigo Rodarpe, 50, who has lived in Bell for 30 years and personally knows people in the community who have lost their homes because they couldn't afford the rising taxes. "I wish we could get the money back, but I'm happy because at least we don't have to pay more in the future."

Rodarpe and other members of the grassroots Bell Association to Stop the Abuse say more change needs to come in the way of further resignations.

In the meantime, investigations by the state attorney general and the Los Angeles County District Attorney's Office into potential civil and criminal activity in Bell are ongoing.

Michelle Diament is a frequent contributor to the AARP Bulletin.