The Background
The decision to possibly renew a $111 parcel tax via the May 3rd mail-in election is forthcoming. From everyone I have spoken with, I believe it is safe to say that your ballot will be waiting in your mail box. The purpose of this parcel tax is to provide the San Carlos School District with an additional $1,000,000 per year. In 2003, voters passed Measure D. Measure D consisted of a yearly parcel tax of $98, as well as an adjustable cost of living factor built-in to each successive year. Measure D has been in place since 2003 and is scheduled to run through 2011. With the cost of living factor, Measure D currently sits at $111. The possible upcoming San Carlos parcel tax measure would basically be an extension of Measure D for another eight years. The only difference is that a cost of living factor would not be in effect for those eight years, keeping the parcel tax locked at $111.
The Frustration
Out of all the topics covered on this blog over the past four years, I can tell you that nothing gets people more riled up than San Carlos schools and taxes. Combine the two, and you are going to get some very strong opinions. The San Carlos School District, through no fault of its own, has the unenviable task each year of trying to balance a budget that yields higher costs with fewer funds each passing school year. To their credit, they have done so and have kept all of our schools at an elite level. However, the SCSD has been aided during the past few years by the herculean effort of the San Carlos Educational Foundation and the parcel tax. So precarious is the financial situation that losing the parcel tax as a revenue stream would be unconscionable in the view of many. I’ve sat through a few of these school parcel tax measures over the last ten years and I can tell you that the amount of angst ahead of this one is palpable. The frustration is coming from many parents who work tirelessly to support their school through volunteer hours and donations. Some have told me that if the parcel tax measure does not pass, private school or going to a public school outside San Carlos is a very real possibility. The frustration seems to be compounding itself as there appears to be a growing belief among some volunteers working to help our schools that there are more than a handful of parents in San Carlos who don’t want to contribute anything to the schools, and expect someone else to pick up the slack. “At the end of the day, I can deal with someone not wanting to donate to our schools. I get that. Public education is public education. But to not pass a hundred dollar parcel tax which supports the main reason your property values remain so high in San Carlos is mind-boggling,” was how one parent described the situation.
How the Preparation for Proposition 13 Reduced the SCSD Revenue Stream
Many in San Carlos do not understand how we can have such high property values, but our schools have very little money. The truth lies in what happened shortly before Proposition 13 was implemented. It’s a bit confusing….but here goes….. Just prior to Proposition 13 going into effect, San Carlos was a different town than it is today. San Carlos certainly had kids, but not nearly on the level that it does today. It was not an educational destination for families on the peninsula. The City of San Carlos decided that it in order to have its property taxes remain as low as possible, the portion or percentage of property taxes which were to be earmarked for our schools was to be relatively low, compared to other cities and districts. When Prop 13 became law in 1978, it essentially froze the disbursement rates that cities were using for determining the share of property taxes to be used for its schools. San Carlos was frozen at a relatively low portion or percentage of its property taxes going to the San Carlos School District. This rate has never changed, thus it has been incredibly difficult for our schools to keep up, financially. Further, it is legally impossible for San Carlos and cities similar to San Carlos to change their disbursement percentage from pre-1978. However unfair this may seem, it’s a reality that our district has had to deal with for the past 30 years.
At the same time as the implementation of Prop 13, a very famous California Supreme Court case was decided. The final ruling in Serrano v. Priest stated that the State of California had an obligation to equalize the disparities in the funding of California School districts. The result was a political compromise. Essentially, all school districts in California were given a choice: (1) districts with very high property taxes could opt to be self-funding from their property taxes with very little help from Sacramento (as long as they could prove viability); or (2) districts could agree to essentially forego the heavy dependency on their local property taxes and join the revenue stream from the state budget. Almost all of the districts opted to be a part of the state budget to secure a minimum level of funding each and every year. In fact, out of the 1,000 plus school districts in California, only 65 went with choice #1, and became what is referred to as Basic Aid Districts . One such district which decided to become a Basic Aid District is the Palo Alto Unified School District. Obviously, this proved to be a very good move for Palo Alto.
Given this information it now becomes clear that an increase in property tax revenue does not translate to more money for our San Carlos schools. While in Basic Aid Districts the increase in property taxes would most likely translate to more money for schools. It is also easy to see why so many are asking to either repeal Proposition 13 or build in an amendment which would give cities and districts some more flexibility in positioning themselves to maximize the property tax revenue percentages going to their local schools.
Summary
I rarely contribute my own two cents on an issue such as this, but the one thing I can tell you with complete certainty is that the San Carlos schools are far and away, the number one reason people move to San Carlos and the reason they are willing to pay so much to live here. I would estimate that 9 out of 10 buyers mention this in my first meeting with them. There are several reasons to vote in favor of the parcel tax in May. Helping our schools, kids, community and property values, just to name a few. It could be the best $111 you’ve ever spent.
22 Comments
I am all for the parcel tax as long as there is no senior citizen exemption.
Excellent Summary Bob. I could not agree more. I guarantee, if our schools go downhill and we are no longer an educational destination on the peninsula, that $111 a year is going to be miniscule when compared to how much each San Carlos homeowners will lose in property value. As property values decrease, property tax revenue will also, sending even less money to schools in the long run. It is a very slippery slope and the decision to me seems so clear. Whether you are a property owner making a sound financial decision, someone who has kids entering our schools or just someone who values education for all the our citizens, voting to renew the parcel tax is a very smart decision.
Agreed. Paying this school parcel tax is a good investment in San Carlos. Perhaps we should be taking a closer look at the sewer fee which is >$1,000 per year as an opportunity to make this tax seem more acceptable to homeowners.
Nicely done, as always, Bob.
A couple of things you and others might find interesting…
You mentioned that the property tax allocation formulas have been frozen, by law, since just after Prop 13 passed. The initial post Prop 13 allocation formula had low tax rate areas subsidizing (that’s right, subsidizing!) high tax rate areas! This was an unintended consequence caused by the unexpected passage of Prop 13 (unexpected by our elected representatives of the time, at least).
Subsequently, the formula was adjusted (and made more complicated) to resolve this inequity and recognize that new communities would be formed and new public services that were funded by property taxes would be established. I’ve never been able to get a clear answer to the simple question of “did the change eliminate the low rate areas subsidizing the high rate areas?” In fairness, the revised allocation formula makes that a difficult question to answer. But still…
I always use the story of how Basic Aid districts came into existence as a wonderful example of how nothing is ever simple in politics, and in the political arena there ain’t not such thing as a straight line connecting two ideas :).
The Supreme Court decision you cited required the Legislature to equilibrate school funding throughout the state. Their solution established a minimum funding level that all districts were entitled to (this is what ended up being called the Revenue Limit, although why they called what amounts to a floor a Limit is something I’ve never understood).
But establishing a floor immediately raises the question what do you do with districts whose share of local property taxes is above the floor? You could re-allocate their education funding to other, less well-off districts on the basis that providing equal access to education is a State constitutional obligation…but that would be political suicide, since those well-heeled districts tend to be politically powerful :).
The practical political answer is you let them opt out of the system. Those are the Basic Aid districts. It’s not that they made a smart move, but that they didn’t make a dumb move — if they’d signed up for the Revenue Limit program they’d have lost funding.
Thanks for your support of the District and our schools!
– Mark
Mark,
Thanks for the further explanation. Prop 13 and how it works with school funding is a mystery to just about everyone.
Thank you for your work as well.
Bob
So…$12K+ year for private school tuition is preferable to increasing one’s contribution to SCEF by a couple of hundred dollars a year? That seems like a losing proposition to me, and I hope those frustrated parents realize such threats do nothing to endear their cause to those residents who are adamantly opposed to more public dollars for education (I myself have a child in public school and donate my time and money, so I am not ignorant to the funding needs). I don’t know what is solved by withdrawing one’s support for our schools.
I’ve had the conversation enough times to know that when the issue of property values are raised – and they are valid – those who oppose raising additional tax revenues just do not hear it. I hope SCEF and each school’s PTA disseminate fundraising information as a part of this ballot measure, as I’ve also heard it said many times that the community isn’t doing enough on its own to raise funding, which the numbers will show simply isn’t accurate.
AC,
I understand your points. We have put our kids through SC public schools and my youngest is just finishing up. However, I think the reason most are becoming increasingly frustrated is because you are hit over the head every year, every month, every week with regard to something else that is being cut from the budget. It’s relentless and a fact of life in SC right now. I could see how not passing this measure would really rub some the wrong way, and could be the final straw for families who have lived through this for a few years. I truly appreciate all that our schools and district leaders have done and I hope those who are not seeing the direct benefits of this tax, can at least appreciate what it does to maintain their property values.
Bob:
You are correct in asserting that emotions run high when schools and taxes are discussed in our current political and economic environment.
The level and civility of our political discussion and discourse has deteriorated greatly over the past ten years. San Carlos residents have little or no impact on political discourse in Wash DC or Sacramento, but we can control the civility of San Carlos political discourse.
Can San Carlos residents debate and discuss this issue in a way that refrains from personal attacks, name-calling, and demonization of those that do not agree with our own positions? I hope so.
As President Obama has said on many occasions: “We can disagree without being disagreeable.”
Let’s have a vigourous discusson, let’s debate the issues and ask the hard questions. But let’s do so in a way that models the behaviour we would like from our own kids.
I once had the pleasure of hearing Lou Holtz speak and he said: “Criticize the performance, not the performer”. Applied to political discourse, one could say: “Criticize the position, not the person holding that position”.
Many strongly believe that increased spending increases the quality of service. While this may be true in some cases, it is not true in others.
Here is a small example that has nothing to do with education: Until recently the City of Palo Alto had City employees maintain the Palo Alto Municipal Golf Course. Several months ago, Palo Alto removed their employees from course maintenance and the contract was awarded to a private contractor to reduce expenses. And guess what? The service level – the condition of the course – has actually improved while expenses were reduced. The condition of the course especially the greens is superior to what I can ever remember it to be.
Everyone supports education and realizes its importance. That being said, taxpayers have a right to expect their tax dollars are spent wisely.
Recently the SCSD received, I believe, about $500,000 from a federal program approved in October 2010. This money could be described as “mana from heaven”. It kind of came suddenly from nowhere. From Seth’s blog, I believe this money was used to provide teachers an additional staff development day.
My question is: was that really the best use of the money? Why not another day in the classroom by the teachers? Upgrades to computer and library facilities? Payment towards any debt carried by SCSD? Put away to pay for future expenses? Perhaps there were stipulations in the bill that allocated this funding? I do not know.
More than anything, no matter the outcome that arises from our democratic process, I hope the debate and discussion can be completed in a respectful productive civil tone.
Arn,
The emergency federal education monies can only be used to pay teachers (the actual language is more involved than that, but that’s the gist). Things like upgrades to computers and libraries and debt service are not allowed.
The contract settlement with teachers last year also required both parties to revisit the cuts the teachers accepted if more money showed up (again, I’m simplifying). Since reversing cuts was what Congress voted those emergency funds for, the District would’ve had a hard time not using at least some of the money to restore cuts.
Lastly, staff development is very important to maintaining excellent educational outcomes. I think sometimes the general public thinks “staff development” means “going on a golf outing”, since that’s often what it means in the corporate world :). In public education, it means bringing in experts on best practices to hone, update and enhance teaching skills. The District wouldn’t have the results it does without its historical investment in staff development.
– Mark
Mark,
Thank you.
I thouhgt there might be limits or “strings attached” to that funding which is why I raised the point in my original coment.
I just want to acknowledge that in my opinion the SCSD Board is doing a good job in difficult times. You are trying to balance the needs of various community groups 1) teachers who desire increased compensation on a regular basis 2) highly motivated and involved San Carlos parents who start charting their child’s academic career before they start 1st grade 3) taxpayers who have “hit the wall” on seemingly endless requests for new, higher, more, and/or extension of taxes 4) while funding from state and federal govts is declining and erratic at best.
I know it is a tough job – it’s like the Board is between a rock and a hard place.
In trying to put the financial issues in context, I am reviewing the SCSD salary schedule located at:
http://www.sancarlos.k12.ca.us/wp-content/uploads/CertEmpSalSchedule.pdf
I believe I have a fair understanding but the piece that I am missing is:
What do SCSD teachers pay towards their retirement?
Do they pay 6.75% of their income into Social Security like most W2 employees do?
Are teachers exempt from Social Security and instead pay into the CalPers system only?
If so, what percentage of their income is paid into the CalPers system?
I believe everyone in San Carlos wants SCSD teachers to be well compensated for their efforts?
But if one does not understand the details of the compensation system, how can one make that judgment?
I have voted in favor of the past two SCSD parcel tax issues.
What’s changed is the economic difficulties of government agencies at all levels and the explosion of debt associated with keeping things running.
So in my opinion the expenses side of the equation must be looked and compensation for SCSD employees is the largest part of the expense side.
I am just trying to get a full understanding on employee compensation in SCSD.
Arn,
I don’t know the precise answers to your questions off the top of my head, but I’ll let you know what I find out. However, I do have a general response which may address the concern underlying your questions.
There have not been any significant changes to the teachers’ retirement program since I’ve been on the Board, which goes back to November, 2001. In fact, I can’t recall offhand any increases to retirement benefits. In that sense, supporting renewal of Measure D, presuming the Board opts to put it before voters, is preserving the status quo ante for employees who have not been seeing their retirement benefits enhanced. I say this because I think what you’re getting at is the unfortunate, IMHO, decisions that some public agencies have made to hold down current costs while increasing future costs (e.g., retirement benefits). The District hasn’t done that.
The District does have a retiree health benefit obligation on its books. It stems from a provision in the teachers’ contract which has the District pay a teacher’s share of his/her health insurance premiums for up to seven years if he/she retires early. We put aside 100% of the cost of that obligation for each early retiree when he/she retires, paying for it out of our current year general fund. The way I see it, that means we’re “pay as you go”. The reason the obligation exists is because every teacher currently in our employ, if they stay at the District long enough and choose to retire early, is eligible for the benefit. By the way, the benefit is, from a purely financial point of view, in the District’s benefit because senior teachers tend to earn more than younger teachers, so making it feasible for them to retire early reduces overall compensation expense. Although it does cost us finely-honed skills and expertise, unfortunately.
From where I stand, Arn, I understand your concern about increasing public sector costs, but I don’t see the District has having contributed to those. So having the community cut back on its support of the District would seem to me like charging the bill to the folks who haven’t rung up the tab :).
– Mark
Arn, Thanks for asking the hard questions. There are lots of questions that should be answered before we commit to another parcel tax. Some questions to ask are, “How successful has the afterschool and summer programs been? Have they made money or lost money for SCSD? By the last budget meeting, it looked like they were losing money there. Good use of tax dollars? Not sure yet…
As of the last board meeting it looked like they hired an additional Assistant Superintendent and hired a Director of Curriculum, a position that was cut just recently. Good use of school money? Not sure yet….
It seems like a lot of money is being diverted away from the classroom and yet they want to get more from us. Not sure yet….
And that stimulus money that the school board member talked about. I checked other school districts and many on the Peninsula are not spending it and are waiting to see how they may need to use it down the line. Seems like San Carlos is one of only a few districts who just gave it back to staff…Good use of school money? Not so sure….
–Derek
Derek,
I’d like to correct some misinformation you have.
The District currently estimates that the new after school and summer programs will net about $65,000 this year, which can be used to help cover general education costs. I think the material you cited showing a different result was before some restructuring of the programs was done. Which is why the restructuring was done.
The two positions you mentioned were not new hires. The District did a fairly significant reshuffling of people among positions recently, in order to give staff people new opportunities and better match skills/interests with needs. But that reshuffling actually ended up saving the District money, because there was also some consolidation that went on. I think the savings amounted to about $60,000 per year.
Overall, the District continues to have one of the lowest, if not the lowest, administrative overheads of school districts in the county. The District has always striven to be very parsimonious in its use of administrative staff, preferring to concentrate its limited resources (its one of the lowest-funded districts in the county) on teaching kids.
The District opted to use most of its emergency federal stimulus money immediately in order to maintain its teaching staff, which had come under heavy pressure in the last few years. At the end of the day we are only as good as our teachers and the classrooms they operate in, so retaining talent/expertise and trying to keep the number of students per classroom from growing out of bounds was deemed critical.
FYI, many of those other districts which deferred using the stimulus money have had to do things like expanding their classrooms to 30 students each or more instead. That’s an option, but it puts some serious strain on the quality of education that’s delivered, so it’s something the District tried hard to avoid. Nevertheless, we did increase student numbers per classroom a bit because it was required to make the budget work.
– Mark
Hi Mark,
As a long time resident, your response did not inspire much confidence. I am not sure how you figure the math but there was no Assistant Superintendent before last board meeting and now there is one. Was this just a title change and no increase in costs? Not so sure…
I have lived in San Carlos for almost 20 years and whenever there was a change in principalship, there was an open process where people who were hired–even internally– had to apply for, and interview for the position with a search committee. It looks like several principals were moved, one district office person all of a sudden is now a vice principal (any experience?) and at least one vice principal is now a principal– all without any open process. Were parent groups involved? Faculty? Was it posted? Were outside candidates considered? If not, why not? I read the letter that was sent to parents like me and it was a surprise to see such a shake-up at Central, TL and Arundel. What was the emergency that it could not wait until July?
For a school district that is asking its taxpayers to pay more in taxes, it does not give the taxpayers much confidence when the school district is hiring and promoting for important positions like principals without an open process, without engaging the larger parent community, and adding additional central office staff while, at the same time, talking about cutting resources to the teachers.
Priorities…..
Just curious, didn’t SCEF give the SCSD a grant to start the afterschool and smart-e camps and if you took that money out of the budget, would there be a deficit?
Even less sure now about parcel tax….
Derek,
We’ll have to agree to disagree about whether or not the District deserves the confidence of the public it serves. When I look at the totality of its performance and its decisions – particularly the difficult ones requiring trade-offs – I’m quite confident that it has. Others may disagree, but I think the fact pattern speaks for itself.
Kelly Price, our long-term chief business official, was promoted to Assistant Superintendent as a result of her years of good performance for the District, and because she has been taking on more responsibility as the District looks to streamline its operations. The promotion did not involve an increase in pay. As Assistant Superintendent she is eligible for a slightly larger annual incentive compensation payment if she achieves or exceeds her performance goals. All told, this was far more of a title change than it was anything else. Having worked with three or four chief business officials in my tenure on the Board, in my opinion the community is lucky to have her, and fortunate that she hasn’t moved on to greener pastures.
The District did recently do a fairly broad re-arrangement of administrators. A decision made by one individual created a situation where the District could rotate administrators to give them more experience, and better match their skills and experience to needs. While community groups were not convened to assess the candidates, the moves were discussed extensively by the Board in closed session (because they involved personnel matters). That’s a big part of the Board’s responsibility, and is what we’re elected to do on behalf of the community. I guess if someone wants to criticize us for doing our job, that’s their right, but it doesn’t make much sense to me.
As far as why no external candidates were considered, the answer is simple: the Board and superintendent saw this not as a situation where we had to replace one or more people, but an opportunity to improve the District while lowering costs and boosting morale (e.g., by giving some people new opportunities). That’s not the kind of situation where you do a formal external search.
One final point about your commentary on the administrative moves: it wasn’t a response to an emergency, it was an opportunity that presented itself which gave us a way of getting more value out of our staff. While further reducing costs, on top of the 25% reduction we did during the 2009/2010 school year. The Board discussed the pros and cons of making the change later versus sooner with the superintendent, and we all concluded it made sense to do it over the year-end holiday season. If the benefits outweigh the costs, why wait to realize the benefits? That’s particularly true given these were all internal transfers, of people who had already been vetted by the community.
The response to the moves, by the way, has been overwhelmingly positive. Dr. Baker has been commended by many for making these important moves decisively and expeditiously.
The net “profit” the District expects to see this year from its new after school and summer programs does not include the effects of the SCEF startup grant. That money was given to the District during the 2009/2010 school year to get the program under way. The new programs, by the way, are already considered some of the best in the Peninsula, which is saying quite a lot.
I don’t mean to imply that the District is perfect, or that every decision it has ever made has been perfect. But, in my experience, that’s not a reasonable standard to use to evaluate an organization. Instead, most people look to the whole picture. On that level the District is doing a great job: test scores higher than all but roughly 50 districts in California (out of around 1,000), students who graduate with the tools to do well in high school and beyond, a reasonably good level of morale (which would be higher but for the weight of the State economic crisis), a strongly-supportive parent community and a tremendous spirit of volunteerism from both parents and the broader community. Could we be doing better? Sure. Are we doing more than well enough to deserve continued local funding (not increased, remember, but continued)? I sure think so. And come May, we’ll see what the community thinks.
Derek and Arn, I’d enjoy the chance to get together with you in person to talk about all of this some more. Let me know if you’re interested.
– Mark
Thank you for your response, Mark. The continued dancing around the facts (Incentive bonuses are not really an increase in salary…defending a lack of an open process for the replacement of four administrators, summer programs that fell far short of revenue projections are “some of the best on the Peninsula”–comparing them to Galileo–etc etc) just shows that the taxpayers in San Carlos should be wary of this parcel tax initiative. The hiring of central office staff while talking about cutting classroom programs, closed session deals to move around and bring in new administrators without an open process with the community, are just two examples that should give taxpayers a pause about voting for this parcel tax.
Derek,
It appears you have made up your mind, but I want to correct the implication you are making that this is a new parcel tax. This would extent the parcel tax we already are paying.
How would reducing the amount of money the schools have further help the problem?
I mean extend.
Derek,
You started by raising some specific fiscal questions. When the information I responded with wasn’t to your liking, you shifted the grounds of your argument to being about the District’s recent round of administrator re-assignments. That makes me think you’re more interested in looking for a reason to vote against the parcel tax renewal than you are in understanding the situation facing the kids in our schools.
Far from dancing around the facts I’m sharing what I know with the community. I’m happy to do that, even in the face of your twisting all the information to fit a conspiracy theory. There really isn’t one here. Instead, there’s a public agency that is doing the best it can to continue to provide the excellent education the community has said, many times, it wants, in the most cost-effective way it can consistent with that goal.
By the way, besides the record which I’m trying to share, you have an enormous volunteer-run philanthropic effort that helps support the District, individuals opening their pocketbooks voluntarily. Would they be doing that if they thought the problems you imagine exist, actually did? I don’t think so.
In the end, voters get to cast their votes for whatever reasons they want to use, including that they just don’t want to make the sacrifice that’s being asked of them. But my hope is that they will make their choice in the light of the real situation, the real need, the real value proposition facing our community.
– Mark
When a school board member dances and choose not to directly answer questions and, in the process, prefers to insult the taxpayer asking those questions, it certainly does not make a strong case to trust the school district with more taxpayer dollars. In my twenty years in community politics, I have yet to see that strategy succeed.
In the end, voters get to cast their votes for whatever reasons they want to use. And, certainly a lack of honesty and transparency is a good reason to think twice about the parcel tax measure.
Mark,
On behalf of myself and my family, thank you for taking such an important, yet mostly thankless job. For a job that pays nothing, and forces you and the rest of the Board to make very difficult decisions for our community, we are grateful for the effort. Derek’s is entitled to his opinion, but I feel some of his thoughts especially on transparency are way out of line.
Thanks again for everything you do for our community.
Bob and all,
I checked your blog after our dinner on Friday night.
Los Altos just approved an $193 increase of their directed to schools parcel tax to $800! Their schools, at all levels, are highly reputable and their real estate prices have maintained high. While maybe outlandish and improbable given the 2/3 majority requirement, that should be the SC goal.
With that level of commitment, we can continue to have stellar elementary schools, better middle schools, better differentiated programs for gifted children and more.
I do agree that, whether the parcel tax is $80 or $800, we must be responsible, accountable and transparent with the funds used so that the citizens see that their $ are being well spent.