School Board Candidates Discuss Issue 1: The School Parcel Tax
The PCA posed a series of six questions to candidates for the Piedmont School Board in the upcoming election on February 7. Following are School Board candidates’ responses to question #1:
The school parcel tax has increased at an annualized rate of 15% per year over the last 10 years and now represents 48% of the district’s operating budget. A large disparity exists between the average school parcel tax for residents of Moraga (under $1,000 total K-12 assessments) versus Piedmont (averaging over $3,000). Both are excellent school districts. How would you address this disparity? Do you support further increases in the parcel tax? Many school districts provide an exemption to residents 65 or older. Do you think Piedmont residents 65 and older should be able to opt out of the tax?
Response by School Board Candidate Sunny Bostrom
Since you state that the excellent Moragacanyon School District assessment is only 1/3 as much as that of the Piedmont Unified School District, I would encourage us to study the manner in which they run their affairs to learn the reason for the disparity.
I would not support further increases in the parcel tax until I learned whether or not the expenses were prudent and fiscally sound.
It has been stated that many districts provide a parcel tax exemption for people over 65 years of age. I would support that. I would also consider an exemption for the families of the 5% of all Piedmont school aged children who live below the poverty line according to the last U.S. census. The poverty in Piedmont just rose from 2% to 5%, the biggest increase in the Bay Area. This issue is something the School Board should investigate. If 5% of our citizens disclosed this information, it is possible that the actual numbers are actually greater. Lost jobs often mean lost health care for the entire family and deferred dental and vision care as well – elements that greatly impact education and the well-being of all.
Response by School Board Candidate Jon Elliott
In the Citizens Advisory Committee on Parcel Tax Measures B & E, we spent a lot of time looking at comparable districts and their funding. It turns out that similar-seeming areas, such as Moraga, have very different tax bases. Piedmont has very few commercial properties, and a large number of houses with property values held far below market levels by Prop 13. Some other high-performing districts include low-income areas that attract higher levels of state and federal funding. Piedmont’s high parcel taxes and high voluntary contributions bring our spending per pupil to levels comparable to other high-performing Districts, so it’s most fair to say there are disparities in how different districts achieve rough parity in spending.
However, because our parcel taxes are already high, I believe the possible size of future rises should be evaluated closely when designing the next parcel tax measure for the 2013 ballot. For example, Citizens Advisory Committee member and Piedmont retiree advocate George Childs favors a freeze, but acknowledges that residents may find 2% annual rises (the same as Prop 13) more defensible than the 5% annual increases in recent years. Piedmont schools desperately need the parcel tax, and we can’t alienate voters in the nearly 2/3 of households who have no students in our schools.
I also believe we should investigate income-based exemptions (partial or complete), as a way to prevent hardships. I don’t start out favoring an aged-based exemption that doesn’t consider incomes, but look forward to learning more as part of a broader discussion.
Response by School Board Candidate Sarah Pearson
To my understanding, the current parcel tax represents 30.3% of the district’s operating budget. Combined with other parent contributions, this means that 44.8% of our budget comes from Piedmont residents. The Parcel tax is essential for our schools, and is the primary reason that Piedmont’s home values are higher than our surrounding neighbors. While I don’t know all the details of Moraga’s finances, it’s worth noting that Moraga is a larger community, in both geographic size and population, and also has more than 300 tax-generating businesses within its city limits. While there are similarities, it is not directly comparable to Piedmont.
I have spent many hours discussing Piedmont’s school parcel tax and budget. I hope and expect that the next parcel tax campaign (in spring 2013) will be a renewal of the base and that we will not need to ask the community for a three-year emergency measure, as we did last time. Parents and educators greatly appreciate the generosity of our community.
Much has been done already to cut costs and increase revenues for our schools. The District has made cuts and employees have made concessions. In addition to paying the parcel tax, parents are also contributing to the Giving Campaign at record levels. (The “ask” per family is $1500 per year.) It is this partnership, with everyone making sacrifices, which has allowed our schools to stay strong in spite of more than five years of declining funding from the state of California. It is a complex tradeoff—balancing the concerns of the taxpayer, the needs of the employees and the programmatic needs of the students.I am willing to explore the idea of a senior exemption. However, Piedmont thrives because everyone contributes. If there is sufficient community interest in the idea of a senior exemption, we could conduct a thorough study of the costs and benefits as well as the non-tangible results.
Response by School Board Candidate Rick Raushenbush
(a) A large disparity exists between the average school parcel tax for residents of Moraga (under $1,000 total K-12 assessments) versus Piedmont (averaging over $3,000). Both are excellent school districts. How would you address this disparity?
“A high-quality public education has been a cornerstone of American success and prosperity. I am proud to live in Piedmont, where the vast majority of voters repeatedly have endorsed the value of education by approving significant parcel taxes that are fundamental to the District’s budget. The school parcel tax reflects what Piedmont, as a community, wants in its schools.
Parcel tax amounts vary among districts, depending upon voters’ willingness to approve them, each district’s need for local funding, the educational program the community desires, and the number of residential and commercial parcels. Piedmont residents’ willingness to pay parcel taxes for the school system is fundamental to the District’s excellent academic program. Parcel taxes account for 32% of the District’s 2011-12 General Fund Budget (not 48% as stated in the Question). There is also no doubt that parcel taxes have increased over the past decade, though the Measure E emergency parcel tax expires in 2012. In addition, Parents’ Clubs and Piedmont Educational Foundation donations to the District have significantly increased. As a result, during a time when per pupil education spending in California has fallen to near the bottom in the nation; Piedmont schools provide an educational program ranked near the top in the nation.
So, why are Piedmont’s school parcel taxes higher than Moraga’s parcel taxes? This is simply another way of asking why Piedmont schools cost more than Moraga’s schools. Some reasons, based on EdSource data, appear to be: (a) Moraga is a K-8 school system, which costs less to operate than a K-12 school system; (b) although Moraga has a higher starting teacher salary than Piedmont, Piedmont teachers have more years of teaching experience than teachers in Moraga, and Piedmont pays experienced teachers more; (c) Piedmont employs a higher percentage of credentialed teachers; and (d) Piedmont has smaller class sizes than Moraga. Other reasons may be that Moraga has more parcels (including commercial parcels) paying parcel taxes than Piedmont or that Piedmont has more students requiring special education and/or other support services. Although further research could be done to compare PUSD with other districts, the real question is whether PUSD’s costs could be reduced without harming the educational program. Over the past four years, the Board, and the Budget Advisory Committee and Parcel Tax Committee, have looked for ways to reduce costs. Although we will continue to look, with 90% of the District’s expense being compensation, cost reduction means cuts in compensation (which we have done) and/or reduction in personnel (which we also have done), which in turn impacts class sizes and adult to student ratios.”
(b) Do you support further increases in the parcel tax?
“I support the Board’s Guiding Principles for Multi-Year Budget Development, which provide, among other things: “Over the long term, stabilize the local taxpayers’ share (percentage) of funding the District‘s budget by reducing the growth rate of local parcel taxes.” Right now, we are dealing with a 20% cut in State funding. Federal stimulus funds and the Measure E emergency parcel tax, which filled some of the gap, are gone. The Board’s tools for dealing with budget deficits are limited to:
- Parcel taxes and any increases authorized by voters;
- Soliciting donations from Parents’ Clubs and the Piedmont Educational Foundation;
- Employee compensation cuts; and
- Reductions in personnel costs by reducing personnel.
Each of these tools requires sacrifice by some portion of our community and everyone in our community has sacrificed over the past three years to fill the gap. If State funding does not return soon, I will consider the facts at the time, District recommendations, public input, the Parcel Tax Citizens Advisory Committee recommendation, and other options in deciding whether to support increasing the parcel tax by none, some or all of the voter-approved 5%.”
(c) Many school districts provide an exemption to residents 65 or older. Do you think Piedmont residents 65 and older should be able to opt out of the tax?
“I would not support exempting homeowners 65 or older from the school parcel tax for several reasons.
- Most of us benefited from a good public education paid for by other homeowners when we were young and, in my opinion, we have a moral obligation to pay for a good education for our community’s children. An educated citizenry benefits us all.
- A “senior exemption” would exempt a large percentage of homeowners from paying the parcel tax, either leaving the remaining homeowners to contribute the lost revenue or effectively forcing the District to lay off a significant number of employees and increase class sizes dramatically.
- All of us benefit from the higher property values in Piedmont that result from the excellent schools here.
- To the extent the request for an exemption is based on the possibility that older homeowners are less able to afford parcel taxes, age does not necessarily correlate with less wealth. If there are a significant number of homeowners in Piedmont unable to afford parcel taxes, I would prefer to address that directly through consideration of an exemption based on an inability to pay.”
Response by School Board Candidate Andrea Swenson
Comparisons of school spending district by district are inherently flawed because each school district receives varying amounts from the state based on complicated computations. Piedmont spends an average of $11,000 per student but receives only $6000 per student from the state. In Piedmont, the shortfall is subsidized by generous parent and community responses to organized fundraising efforts and the Parcel Tax. Fundraising dollars combined with Parcel Tax revenue represent 35% of the PUSD budget. Over the past 3 years, diminishing state funds have resulted in a 20% per pupil loss of revenue. Despite this ongoing loss of revenue, Piedmont has done something extraordinary. We have maintained an excellent educational program due to a comprehensive and collaborative effort among staff, parents, and the entire community. This collaborative effort, to support the education of children, should make all Piedmonters proud.
The next Parcel Tax will be on the ballot, Spring 2013. I anticipate there will be no increase in the base tax. Offering a senior exemption from the school parcel tax is commendable. It is an unfortunate reality that if we did so, we would then have to substantially increase the base parcel tax to subsidize the loss of revenue which we rely on to maintain our schools.
When considering the prospects for future school parcel taxes, the district board also needs to take into account the fact that next year the state will begin aggressively enforcing existing tax law, which makes clear that school parcel taxes are NOT tax deductible (https://www.ftb.ca.gov/individuals/Real_Estate_Tax_Deduction/index.shtml#items). For those Piedmont residents who have in the past taken the full property tax deduction on their income tax returns, this will result in a combined federal/state income tax increase of about $1,000 per year.