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Why your property taxes are not getting to your schools

Proposed Initiative Would Give School Districts Back Their Property Taxes

Proposed initiative would give school districts back their property taxes

February 14th, 2014
By John Fensterwald

Click here to read full article on the Ed Source site

The parent activists who formed Educate Our State say it’s time for the state to stop robbing Peter to pay Paul. Peter, in their view, being the schools and the theft being billions in property taxes.

The San Francisco-based parent organization is circulating an initiative for the November ballot that it says would sever budget machinations that have contributed to school districts’ and community colleges’ financial distress since the Great Recession and leave them vulnerable when the next economic downturn comes.

The nine-page ballot measure, involving a constitutional amendment and four statutory changes, would delve into the complexities of the “triple flip” of 2004 and other clever financing moves that legislators invented while playing a shell game with shrinking public money. But the result of the initiative, “Protection of Local School Revenues Act of 2014,” would be simple: permanently return about $7 billion in property taxes that school districts would have had this year if then-Gov. Armold Schwarzenegger and the Legislature hadn’t shifted the money to cities and counties to cover, in turn, what the state owed to them. The ballot measure would prevent the state from tampering with school districts’ property taxes in the future. Voters already have given cities and counties that protection; they did that by passing Proposition 1A in 2004.

Schools and community colleges are funded through a combination of local property taxes and state taxes. This year, property taxes contributed 16.7 percent of revenue for K-12 and community colleges; that portion would have doubled, to 33.3 percent, if the state hadn’t redirected more than $7 billion owed to schools, according to calculations by Jennifer Bestor, an Educate Our State parent from Menlo Park with a background in finance, who has been deeply involved with the initiative.

The ballot measure wouldn’t increase money for schools and community colleges; that’s not the intent, Bestor said. Instead, the initiative would swap a volatile source of revenue currently coming to schools – state taxes – for property taxes, a more stable and reliable source that had previously belonged to the schools, she said.

Late payments to school districts illustrate why this is important, Bestor said. After state revenues plunged in 2008, the state responded by postponing payments of money owed to K-12 schools and community colleges to the following fiscal year. Known as deferrals, the late payments grew to nearly $10 billion in 2010-11, nearly a third of the state’s portion of school funding. Those districts that couldn’t borrow money from their county treasurer turned to other lenders and paid higher interest rates; districts in the worst financial shape, which couldn’t borrow, cut programs and jobs.

The districts most adversely affected by deferrals included districts in San Bernardino County and Ravenswood School District in East Palo Alto, which had the least property wealth per student and therefore relied on state revenue for most of their school funding. They also generally have high percentages of low-income children. Increasing districts’ reliance on state revenue to fund schools created more pain for schools, Bestor argues.

Gov. Jerry Brown is the first to acknowledge that deferrals, part of what he calls the state’s “wall of debt,” have harmed schools and community colleges. That’s why he is proposing to expedite ending late payments by paying off the last $6 billion in deferrals in the 2014-15 state budget. And, to deal with the volatility of state revenues, Brown wants the Legislature to create a bigger rainy day fund tied to fluctuations in capital gains revenue. He would add a second tier of protection within the rainy day fund to smooth out spending under Proposition 98, the formula that determines the annual level of school funding.

Bestor takes cold comfort in these measures. As Brown observed in his summary for the 2014-15 budget, since the Second World War, the state has seen an economic recession every five years, on average, and it’s been 4 ½ years since the last one, leaving schools vulnerable once again to manipulations of the Prop. 98 guarantee if revenues fall.

And a rainy day fund doesn’t address the issue at hand: “First, make us whole; give us our stable, reliable stream back, instead of protecting us from the volatile conditions we have been force-fed,” she said.

Stiff opposition from counties, cities

For supporters of the initiative, the cause is just and the need self-evident. But qualifying for the November ballot by relying on parent volunteers to collect 1.3 million signatures at farmers markets and outside school property by mid-April will be challenging. (Signature gatherers can be spotted wearing Dr. Seuss red-and-white striped “Cat in the Hat” stovepipe hats.) And if the initiative does make the ballot, it will face formidable opposition from cities and counties, which already are complaining that Brown and the Legislature have cut social services severely and unloaded public safety responsibilities on them.

The initiative would free up $6.8 billion in the General Fund but requires that the state backfill only $4.3 billion that cities and counties would lose in property taxes. That was the initial amount that was transferred to them in 2004. Since then, the revenue, tied to growth in assessed valuation, has grown by $2.5 billion, which the Legislature may or may not cover when the changes take effect.

“The Educate Our State initiative would impose a severe and immediate reduction to county and city property taxes of about $2.5 billion in 2015-16 and growing over time,” Matthew Cate, executive director of the California State Association of Counties, wrote in an email. “This means counties and cities across the state would have to reduce public services that rely on general purpose revenues, which essentially means public safety reductions. It is difficult to contemplate what a reduction of $2.5 billion in public safety services looks like in our communities, particularly when counties have assumed significant new responsibilities for incarcerating, supervising and rehabilitating new offender populations.”

Katherine Welch, a board member of Educate Our State, said that the organization will announce endorsers of the ballot measure on April 1. Meanwhile, it is asking school boards to back a resolution of support and let elected officials know they’re behind it.

John Fensterwald covers education policy. Contact him and follow him on Twitter @jfensterSign up here for a no-cost online subscription to EdSource Today for reports from the largest education reporting team in California.

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Mayor's Race Gets an Education Forum

Mayor’s Race Gets an Education Forum

Thursday, February 20, 2014

On Wednesday, the county Board of Education agreed to participate in a mayoral candidate forum on education. Educate Our State invited the Board be a partner, and the data show a thoughtful discussion is needed. Nineteen of the thirty-one districts in the county are located in San Jose, and nearly 50 percent of San Jose’s public school students test below grade level in math and English.

These outcomes should be an issue every mayoral candidate is willing to discuss, even if it comes with some risk to the candidates.

Educate Our State is a grassroots organization founded by seven moms in San Francisco who were frustrated by the state budget crisis of 2009-10. Encouraged by a teacher, the moms held a town hall style meeting attended by more than 1,000 parents, political groups and non-profit agencies. A panel of elected leaders—including the mayor of San Francisco, state assemblymembers, states senators and members of the Board of Supervisors—listened to the group’s ideas and concerns. That meeting led to the creation of the organization Educate Our State.

There is enormous push back about candidates for mayor in San Jose including public education in their campaign. Mercury News columnist Scott Herhold and I met and agreed to disagree about the issue. He is adamant about the mayor not convoluting his/her city services agenda with educational issues.

Councilmember Pierluigi Oliverio, a candidate for mayor, agrees with Herhold, and last month he wrote an op-ed saying schools are doing fine without mayoral involvement. He calls the mayor’s meddling in education issues a distraction from the real issues: core city services. I disagree.

Councilmember Sam Liccardo, also a candidate for mayor, wrote his own op-ed. “It is certainly true that San Jose’s mayor shouldn’t take over schools. There’s plenty of politics to go around,” he wrote. “Yet if our next mayor hopes to improve public safety, economic opportunity and city services, then supporting public education must become a top priority.” I concur.

In 2006, the Council on Mayors published a 40-page document titled, “Mayoral Leadership and Involvement in Education.” The report concluded, “If schools don’t work, the city does not work. You, the mayor, pay the price whenever you are not involved in education.”

Only some of San Jose’s children are doing well today. Schools, school boards, superintendents and mayors of cities should work together at the highest levels to promote educational success for all. Our future quality of life hangs in the balance.

In July 2012, Philadelphia Mayor Michael Nutter said, “I believe education is the most important issue of our generation. … It has the power to provide a vehicle out of poverty as well as bring children a step closer to grasping a piece of the American Dream.”

I believe our forum could fill the City National Civic Auditorium, the venue for Mayor Reed’s State of the City address tonight. I wager Mayor Reed will mention public education in his final speech.

Joseph Di Salvo is a member of the Santa Clara County Office of Education’s Board of Trustees. He is a San Jose native. His columns reflect his personal opinion and can be found weekly on San Jose Inside.

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Signatures needed for ballot initiative to change education funding

Redwood Times

by Sandy Feretto

Cinnamon O'Neill Paula, executive director of the Garberville-Redway Area Chamber of Commerce, is working with Educate Our State to get an initiative on the ballot this November that aims to provide for more transparency and stabilize state funding for education.

The initiative, called The Protection of Local School Revenues Act of 2014, was designed by Educate Our State, which Paula said is a grassroots group of parents throughout the state of California who “recognize that something needs to change with the education system.”

“We are parents that have tried to make change within our own districts and our own schools and quickly realized that it wasn't just a local funding problem that the schools were having, it was a statewide problem,” Paula said in an interview with the Redwood Times.

Paula said she found Educate Our State a few years ago when the state trigger  cuts were threatening Southern Humboldt school transportation. Though most of the people in Educate Our State were not having the same transportation issues, Paula reconnected with the organization later when she had gotten more involved in broader school funding issues.

Paula explained that Educate Our State was started in 2009 by six mothers of school-age children in San Francisco that had tried to fix things on a local level and realized they could not bake-sale their way out of the funding issues that were facing the education system in the state. The mothers had a town hall meeting and formed the group, then joined with parents all over the state who felt the same way and were willing to step up and try to make change happen, Paula said. She is now a community leader with Educate Our State and has started a pilot chapter in Southern Humboldt.

Paula recently attended an Educate Our State conference in LA where she learned about the proposed initiative and other changes in state funding mechanisms for education.

She pointed out that we are lucky in this area because our local school superintendent, Catherine Scott, knows a lot about the new state funding requirements.

Paula explained that initially Educate Our State had looked at trying to close the loophole in Prop. 13 that allows commercial property to be transferred without reassessment. But when they researched state funding and budgeting, the group realized there was no guarantee that funding generated by closing the Prop. 13 loophole would go to education.

That was partly because of Prop. 57, passed in 2004, that secured local property taxes for almost everything but education. So, Paula said, “because the state was broke and needed to pay debts ... they decided they would take that property tax that was no longer secured at the local level for anything and they would put it into the general fund and they would give it back to the schools as they saw fit.” She said the state called it a “triple flip” and it has caused a loss to education funding of about six billion dollars a year.

Paula said that Educate Our State is not sure that every school district will get more funding if the initiative passes, but they think it will stabilize the funding so that school districts will not have to wait every year to find out how much money they are getting after deferrals as they do now. If Prop. 13 can be reformed, she said, the schools will do a lot better. There does not seem to be a lot of opposition to the initiative because it does not raise taxes, Paula pointed out, and provides for more transparency with education funding and property tax.

Paula said that 1.3 million signatures are needed by April to get the initiative on the ballot in November. She said she hopes everyone is registered to vote or registers soon.

Paula is the parent of four boys who go to Southern Humboldt schools, and she views this project as a long-term goal. She does not think that her older children will see the benefits, but her younger ones might. She said she does not want to hand the current education funding mess to her kids to try to fix for their kids.

Paula expressed the opinion that if parents have to raise money to fund school basics like teachers, it is more like a privatized school system. She pointed out that taxes the public pays for schools should go to public schooling. “I want one or the other,” she said, “Not both.”

Paula said anyone who wants to gather signatures, endorse the initiative or help out in any way could reach her by phone at 223-0165 or by email at sohumkids@gmail.com. The initiative can viewed on the website educateourstate.org.

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GOOD - Op Ed

On Election Day, Your Local School Hangs in the Balance

On Tuesday, November 6 I’ll be doing what Americans nationwide will be doing: heading to the polls to elect a president. But, I also live in California, a state that in the last four years alone has seen public schools endure $20 billion in education cuts. On Election Day, I—and every other Californian—have the opportunity to show our support for public education by passing two education-focused initiatives, Proposition 30, the Schools & Local Safety Protection Act, and Proposition 38, Our Children Our Future. With these initiatives, we will send a message to our state leaders that the voting public cares about education and it should be a priority for our state once again.

The two propositions are models for legislation in other states impacted by education cuts.Proposition 30 "temporarily increases personal income taxes on the highest earners—couples with incomes over $500,000 a year—and establishes the sales tax at a rate lower than it was last year." That will provide up to $6 billion per year, most of which is restitution funding for K-12 education, public colleges, and universities, plus some new funds for public safety. The revenue from Prop 30 is already included in the 2012-13 state budget, therefore failure of this proposition would trigger a $5.4 billion cut to education.

Read More Here

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Voters Pondering Competing Tax Measures

Forum will help differentiate school tax propositions --- Brown's 30 and Munger's 38.

With Pasadena schools facing nearly $18 million in budget cuts over the next 18 months, the public education faithful agree that voters must approve a tax increase in November to avoid catastrophe.

But whether to support Gov. Jerry Brown's Proposition 30 or Pasadena attorney Molly Munger's Proposition 38 is another question.

Brown's initiative, backed by teachers unions, would increase the state sales tax and income taxes on top wage earners for seven years to keep education funding at its current level. The revenue also would be used to shore up public safety and higher education budgets and pay down some of California's deficit.

Munger's measure, supported by parent-teacher associations, would raise up to $10 billion a year for K-12 schools for 12 years through a sliding-scale income tax of as little as $7 on those making less than $25,000 per year to as much as $77,000 on those earning more than $1 million. Money would go directly to schools, bypassing the state's general fund.

If Brown's plan wins, Pasadena Unified School District officials would still have to trim $10 million from their budget next year, said spokesman Adam Wolfson. Munger's measure would bring in about $19 million for Pasadena schools next year, but it wouldn't take effect in time to hold off a $5-million cut this year.

To help voters do the math, the Pasadena Education Network is hosting a forum on Thursday featuring advocates for each measure and those backing both.

“Many who don't have kids in public schools will vote no on both, and my biggest fear is that if some of us vote for 30 and some vote for 38, neither is going to pass,” said San Rafael Elementary School PTA President Michelle Calva-Despard. “If we lose this because of a split, that's going to be a real shame.”

During a Sept. 27 PTA event at Eliot Middle School, Munger said she embraced support from voters hedging their bets, but said she also needs 38-only supporters to triumph.

Munger said she will not vote for Brown's measure because school funding has sunk too low to remain flat.

“What you do when you're not giving people anything is threaten to hurt them even worse. Basically, that's the [Brown] plan,” said Munger. “It hurts schools by pretending to help schools when it doesn't.”

United Teachers of Pasadena President Alvin Nash said several teachers have asked him whether they should support both measures.

“We tell teachers, ‘You have to decide for yourself,'” said Nash. But, “If 38 gets more votes, it wouldn't stop the midyear cuts, shortening the school year and bringing additional layoffs in March.”

Marna Cornell, president of the League of Women Voters – Pasadena Area and a retired Los Angeles teacher, said she understands the appeal of Munger's plan, but also why the league backs Proposition 30.

“Education is being starved, but we want to see other programs protected as well as education,” she said.

Munger, a 1966 graduate of John Muir High School, recalled serving as a volunteer teacher there in the mid-1990s and finding students lacked access to basic instructional materials and programs.

“Already by then, almost 20 years ago, I couldn't believe what had been lost,” said Munger, daughter of Berkshire-Hathaway billionaire Charles Munger. She has put about $27 million of her own money into the Proposition 38 campaign.

Calva-Despard said the parent-driven group Educate Our State convinced her to support both 30 and 38.

“Instead of taking care of children, we're arguing like children,” she said. “It took a group of mommies to step in and say if neither of these pass, then everybody loses.”

Pasadena Education Network's “Educating the Education Voter” forum takes place at 7:30 p.m. Thursday at All Saints Church, 132 N. Euclid Ave., Pasadena.

Pasedena Sun

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What Happens if Both Prop 30 and 38 Pass in November - KCET Blog

There's an argument that runs like this: If people vote for only one of the two income tax measures in November, then both are more likely to fail, and if both fail, then woe be it to students and teachers across the state. It's better, then, to vote Yes on both.

The argument refers to propositions 30 and 38, both of which aim to increase the personal income tax in California and use the extra revenue to help pay for education. If neither one passes, public schools would face cuts of more than $5 billion, and that's in addition to the decreases they've already experienced.

That scenario is a scholastic apocalypse to organizations like Educate Our State, a grassroots nonprofit that advocates for better collaboration in fixing and improving public schools.

"Our opinion is that it's very dangerous to send the message that these [two ballot measures] are competing," said Crystal Brown, the organization's board president and a parent of three daughters in the public school system.

Read More Here

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Letter to the Editor: Redwood Times

Be the Change for Our Schools

To the Editor:

Tired of endless budget cuts to our education system, fundraising for teachers, and the never-ending donations we are asked to give all in the name of our children’s education? When does it become private school instead of public school? Can we really turn this around? I believe we can.

I have been part of the group Educate Our State (http://www.educateourstate.org/) for a while now. I really like their grass roots, parents-like-us, approach to improving California’s failing education system. We all know what the problems are - budget cuts, teachers, supplies, no nurses, limited electives and extracurriculars, funding, funding, funding. Let’s work together, within our community, and within our state to make real change to make California’s public education good.

We will be meeting at Juice Jungle to discuss our options and how each of us can really make a difference. For more information please contact Cinnamon 223-0165 or biodieselmama@gmail.com. I will also post handouts and such available to download on www.southernhumboldtkids.com after our meeting.

Cinnamon Paula

Redway

http://www.redwoodtimes.com/letters/ci_21465109/be-change-our-schools

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Vote Twice for Education Over Politics

Californians and our political representatives have jointly presided over the demise of our once-heralded system of public education. Just how far has the once-mighty fallen? California now ranks 40th in per-pupil funding; our standardized testing scores now rank below almost every state in the nation, with only 25 percent of students at proficient levels (44th in math, 45th in reading); more than 180 school districts face major financial strain and are forced to borrow money (at high interest rates) to pay their bills; and class sizes have ballooned to near 40 students per teacher in many school districts.

Huffington Post Blog by Crystal Brown 

Read more here

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Fighting for an Excellent Education

Yesterday, my worlds collided and the resulting flash of light has allowed me to see -- with absolute clarity -- why I am fighting so darned hard to improve the public education system in California.

Over the past three years, I have personally spoken with thousands of parents -- from the beaches in San Diego and the hills of the East Bay, to the valley in Sacramento -- and each has a story of the destruction of their schools, the fleecing of their communities, and the resulting sadness they have felt for the missed opportunities of their children.

Read more here: Huffington Post Blog

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School Beat: What the Next School Year Holds in Store

Another school year is rolling to an end this week, without, unfortunately, closing the chapter on some fundamental challenges that continue to dog our public schools. While we should not lose track of the inspiring successes at many schools and for many students, the significant problems public education supporters need to tackle must remain in our sights, front and center.

Budgetary woes are perhaps the most well-known and easy to understand. In the midst of a continued recession felt very severely in California, no fairy tale powers will let us spin straw into gold and overcome the many decades of financial drain our schools have experienced. Certainly Governor Brown’s latest budget forecast and proposal offer very little in the way of hope. The California Budget Project recently released a report detailing the decline in state level general purpose funding since the 2007, finding a decrease of $530 per student. According to the latest national comparison, we’re now almost at the bottom of spending, coming in at number 47.

This never-ending budget problem is felt keenly at school sites by students, parents and educators. Class sizes have been increased, pink slips to teachers have been sent out, school site councils are making impossible choices between key positions and resources, and furlough days are still a reality. All of this sets a terrible background for current contract negotiations with the teachers’ union, United Educators of San Francisco. UESF members have authorized a second strike vote and a state appointed mediator will be meeting the district and the union at the end of the month to hopefully move things forward. 

Addressing this funding nightmare is no easy matter given California’s broken budget and revenue processes. Lawsuits have been filed against the state for equitable and sufficient funding, but there are a few more things that individuals can do. Making your opinion known to elected officials directly or through organizations like Educate Our State is one important step. Taking a serious look at the tax initiatives on the table is another important one.

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