The key arguments against PAUSD’s Measure A are:
1) The
The
In short, the PAUSD
can not prove that there is going to be a short-fall based on property tax
related revenue over the six-year life of this parcel tax. Moreover, members of the School Board went so
far as to state at a recent school board meeting that this money was going to
be used to increase program offerings!
During the lead up
to placing Measure I on the fall ballot, the
The current
collateral material being circulated by Measure A
supporters does not provide any clear evidence of financial shortfalls. This material walks all around the financial
issues -- not providing any proof that this money is really needed to pay the
2) No Evidence Quality of Education Will
Decrease.
The
During the last two
years, the PAUSD did make some cuts -- about 2.5% of its budget. Most of the cuts were in the area of
support. During these two lean years,
the API and SAT scores went up, even though the
3)
The
The School Board
passed a resolution in 2001 that approved a 10% increase in the District’s
Revenue. This
resolution lead to Measure D, which was used (in most part) to raise the
salaries of the teachers to a level about 25% higher than the regional average
for teachers. The District did
not admit to the voters at the time that it was creating a structural deficit
in its budget. Even now, some four years later, the PAUSD still does is not
dealing straightforwardly with the voters and property owners about this
structural deficit and the need for perpetual parcel taxes to feed it.
The School Board is
now back with the first of its never-ending parcel taxes, which is required to
feed the structural deficit caused by its paying higher teacher salaries
starting in 2001.
4)
The
The Property Tax
revenue (about 70% of the PAUSD’s total revenue) is
comprised of a Residential Secured Roll segment, a Commercial Secured Roll
Segment and a Commercial Unsecured Roll segment. During the past two years, the Residential
Secured Roll Segment has been growing robustly.
The Commercial Secured Roll has been less robust in its growth for the
past two years, due to an exodus from
As well, a number
of assessment challenges by high value property owners such as
The PAUSD has not
recognized the possible volatility of this segment of its property tax revenue
(as much as 16% of the total) and has linked salaries to this
less-than-predictable revenue stream. By
doing so, the School Board has created the high probability of revenue
shortages every time there is a business downturn -- a revenue shortage which
can only be filled by “special” taxes (such as Measure A). The PAUSD School
Board has shown no expertise in managing the finances of a Basic Aid District
that has the complicated property ownership profile that can be found within
the jurisdiction of the
5) Over $1.3M Spent Educating Non-Resident
Staff Children.
The PAUSD allows
staff children to enroll in the PAUSD.
This “program” is costing the District about $1.3M this year. No revenue
from the home school district follows inter-district transfers, so these
students create a loss of revenue to their home districts, and no new revenue
is associated with these students in the PAUSD -- a lose/lose situation for
both districts.
Projecting the
historic growth of this program forward only 5-6 years, it is quite possible
that this cost will increase to as much as $2M per year. The “perquisite” will likely cost the
district upwards of $20M per decade. A
goodly percentage of the “new” money raised by Measure A (if passed) will be
equal to the cost of this unnecessary benefit to some teachers. The program is not carried as an employee
benefit program on the books -- the District has just quietly enrolled these
kids as if they we living here in the PAUSD, passing the cost on to property
owners (single family homeowners, mostly).
6) The PAUSD Has Negotiated Away the Right To
Reduce Salaries in “Lean Years”.
The
7) The
The
The School District
has not “banked” this money in appropriate amounts in its reserves to provide
buffering for the normal ups and downs of the Silicon Valley business cycles,
as well as providing funding for unexpected increases in enrollment that occur
from time-to-time. Given that the
District does not receive money for each child enrolled by the State (as a
so-called Revenue Limit District does), prudent money
management requires that the District maintain the highest reserves available
to it.
Rather than
managing this “extra” money prudently, it has spent it most unwisely on
increases salaries and extra staffing.
8) The
In the fall of
2004, the District promised that any money over-and-above the “new” money of
Measure I (and now Measure A) received from renewed property tax growth would
be used for teacher and staff salary increases.
No increase in productivity from the staff has been requested for these promised
raises.
9)
The School District is subsidizing
The PAUSD is
currently under Court Order to educate about 600 students from
The demographics of
When the Tinsley
Suit was settled around 1986,
It is time to begin
to see an exit strategy for the Tinsley Decision and to end the so-called
Volunteer Transfer Program. The PAUSD needs to petition the Court to vacate the
Tinsley Decree. Failing that, the
10) Parcel taxes are not the best way to
raise money.
Commercial
property, educational properties and multi-family properties generate the same
amount per parcel as a single family home/property. Students and Renters and seniors living in
single-family homes who opt-out of paying the parcel tax are all allowed to
vote taxes on their neighbors and property owners of the jurisdiction. As many as 60% of the electorate is typically
not directly responsible for paying parcel taxes, even though this same 60% can
vote for the tax. Parcel Taxes increase
the hostility that younger property owners acquire when they realize how little
tax older property owners pay under the Prop.13 scheme.
By law, parcel
taxes must be uniformly applied to all property and are not contain any ad valorem
component. Stanford, for instance, is
obligated to pay parcel taxes, even though it enjoys a $2.7B base property tax
exemption. Stanford’s land is divided
into a small number of very large parcels. Some of these large parcels have
been subdivided into about 1,000 small parcels dedicated to staff housing. Most of these parcels are leased to their
occupants, with the tax obligations assumed by the occupants. No matter how big the parcel, or what its use
might be, each parcel can only be levied the same amount of tax.
Seniors are offered
a non means-tested “opt-out”. Of the
roughly 20,000 residential parcels in the PAUSD boundary, about 2,100 seniors
have requested to be exempted from paying the Measure D (2001) tax of $293
yearly (a little higher than most districts offering such exemptions). With the tax growing to almost $500/year, it
is likely that more seniors will apply.
The
11) The School Board is the Source of its
own problems.
The School Board
has created almost all of the “problems” it is facing at the moment. Rejection of Measure A denies endorsement of
the poor money management of this, and previous school boards. Rejection of Measure A will send a strong
message to the School Board that this poor money management into the
foreseeable future is not acceptable.
Measure A is simply an underwriting of the District’s living beyond its means
without any clear promise to reduce spending or applying any cost reduction
techniques that the private sector apply at times like these.
Since the
District’s budget has doubled in the past twelve years, it stands to reason
that it will likely double again in the next twelve years or so. This means that as the current $111M budget
will be at/around $150M in five years or so.
If/when there is another economic downturn, the
shortfalls will be even greater than they are at the moment. This means that the District could be easily having to seek as much as $10M a year in new taxes
because of the precedent that is being set with this Measure I/Measure A parcel
tax levy. The