George Borikas and other local commercial property owners maintained that the measure was unfair because it taxed them differently than residential owners.

A state Court of Appeals ruling on Thursday agreed, tossing out the different rate structure and finding that only the flat $120 rate that residential owners paid was valid.

The court also called for possible "further remedies" in the case, which school officials said could include refunds of some of the money collected before Measure H was replaced by Measure A, the parcel tax passed last year.

"If the trial court orders refunds of tax revenues already collected and spent, this decision has the potential to be a significant blow to our budget with many negative consequences for our students, teachers and staff," Superintendent Kirsten Vital said. "The decision also has significant public policy and budget implications for school districts across the state. Accordingly, we are carefully evaluating all of our options in the courts and the legislature."

David Brillant, the attorney who represented Borikas and the other commercial property owners, said the ruling put school districts on notice that parcel taxes with different rates are illegal.

"From the outset of this case, we have approached this problem with a common-sense approach and we always believed that a tax to be 'applied uniformly' as the law requires, had to be just that -- uniformly applied to all taxpayers, regardless of the type of property they owned," Brillant said.

Measure H needed a two-thirds majority to pass.

Under the measure owners of commercial properties of less than 2,000 feet were taxed at $120 annually -- the same as residential property owners. But those owning parcels more than 2,000 square feet were taxed at 15 cents a square foot, capped at $9,500 annually.

Measure A, which voters passed by more than 68 percent in March 2011, replaced Measure H. It calls for residential and commercial property owners to pay t 32 cents per square foot of a building, with a maximum tax of $7,999 per parcel.

Owners of properties with no buildings pay $299.

District officials said the ruling on Thursday does not effect Measure A, and noted that they won a legal challenge against the measure last year that opponents can no longer appeal. Measure A will sunset in five years.

Among those who joined Borikas in the lawsuit against the district was Ed Hirshberg, who owns the building that houses the Alameda Journal, a Media News publication.

The court decision can be viewed at http://www.courts.ca.gov/opinions/documents/A129295.PDF

Reach Peter Hegarty at 510-748-1654 or follow him on Twitter.com/Peter_Hegarty/.