The technical answer to your question would require a legal opinion.  My understanding, however, is that a Board Resolution reflects the Board’s direction to the District Administration, which would stand until the Board gave the District Administration different direction.  A voter-approved tax measure would be binding upon the Board and the District during the term of the measure.  The tax measure requires at least one public hearing. The Resolution directs the District Administration to hold two public hearings, which is consistent with the Board’s practice at least since I joined the Board in 2008 and I am told before then as well.

There is a balance between setting minimum requirements in the tax measure and leaving room for the Board to refine and improve the oversight process based on experience.  The tax measure requires creation of the Parcel Tax Subcommittee, consisting of 3 to 5 tax-paying members of the BAC selected by the President and Vice-President of the Board, preparing a report to advise the Board, making a presentation at the first public hearing on levying the tax.  Whether the Parcel Tax Subcommittee members are solicited and selected at the first or a later meeting of the BAC, whether there will always be 5 members, etc. are issues where experience may teach us which is the best approach, and therefore the Board, the President and Vice-President have some flexibility in determining how to best accomplish the Parcel Tax Subcommittee goals set forth in the tax measure.  

I have read the concerns about a conflict of interest, but do not agree with them.  The concern is that former District employees have an interest in current District budgets because those budgets could affect them financially.  That is possible, but not very likely.  As for actual pensions, the District has no control over Cal STRS pension benefits or contributions, which are set by state law–once an employee is retired, the employee receives payment from STRS, not the District.  As for other benefits, retired employees are entitled to the benefits available to them under the collective bargaining agreements in place when they retired.  As a result, when the Board capped health insurance contributions for current District employees starting in 2011-12, retirees under CBAs that give retirees what current employees receive also were capped, while retirees under CBAs that gave them what they had received when they retired were not affected.  All District retirees lose District-paid health insurance when they reach Medicare eligibility age and, as of July 1, 2014, will be limited to no more than 5 years of District-paid health insurance or until they reach Medicare eligibility age, whichever comes first.  Unlike the City of San Jose, which sought to change retiree benefits based on economic infeasibility, the District does not have outstanding pension obligations and only a relatively small exposure to paying health insurance benefits for retirees temporarily.  The financial interest of a former District employee as a result of their former employment almost certainly is less than their interest as a taxpayer, i.e. they would save more by opposing the tax than they would gain by supporting it.  I also note that every taxpayer has a financial interest in the Board’s decision.  Ultimately, the Parcel Tax Subcommittee only provides advice to the Board–and the elected Board members will decide on the parcel tax levy and all other budget issues.

All community groups are entitled and encouraged to provide their views to the Board on the parcel tax levy as well as other issues.  The BAC, as a group of individuals who follow the District’s budget throughout the year, provided their view on the need for the levy.   Ultimately, the elected Board members take into account all public comment in exercising their responsibility to decide whether to levy the parcel tax.

The CAC’s work assessing the District’s budget and the need for a parcel tax levy occurred during roughly the same time frame because the Governor’s budget is delivered in January, thus providing at least some idea of the amount of State funding that likely will be provided to the District.  The remaining role of the CAC was to provide information of interest and use to the Board, which has consisted of long-term trends in funding and compensation, and how the District compares with other comparable Districts.  If the tax measure is adopted by Piedmont voters, the Board will decide whether to ask the Parcel Tax Subcommittee if it is willing to update such reports (and prepare any others that the Board may find useful) and the Subcommittee members will decide whether they can devote the time and energy to do so.

As noted above, certain fundamental requirements for a Parcel Tax Subcommittee are included in the tax measure.  The Board has that ability to ask the Parcel Tax Subcommittee to do more, or even to set up other committees, if it feels that oversight needs are not being addressed.  Ultimately, however, the elected Board members are responsible for oversight, including determining the need for parcel tax funding and ensuring the funds are well-spent.

Email input to the Board of Education can be provided at the following addresses:

• Richard (Rick) Raushenbush
  President rraushenbush@piedmont.k12.ca.us
• Andrea Swenson
  Vice President aswenson@piedmont.k12.ca.us
• Sarah Pearson   spearson@piedmont.k12.ca.us,
• Ray Gadbois  rgadbois@piedmont.k12.ca.us
• Roy Tolles  rtolles@piedmont.k12.ca.us

Role of New Parcel Tax Subcommittee –

Piedmont Civic Association periodically publishes “questions and answers” on community issues.  The following responses to PCA questions were provided by School Board President Rick Raushenbush regarding the proposed  role of a new parcel tax subcommittee as part of the Board’s Budget Advisory Committee. The subcommittee would replace the independent Citizens Advisory Committee that reviews the $9.5 million in local school parcel tax levy spending each year.  (See original article.)

I am responding based upon my understanding of the function of the Citizens’ Advisory Committee, the Board’s public comments and the text of the proposed Resolution.  As you know, the Board itself does not take positions other than through properly noticed action items on its Agenda.  

• Why does the Board resolution propose to significantly and permanently reduce the CAC’s charge?

In the Board’s view, the proposed resolution does not significantly change the function served by the CAC, but rather moves it to the Parcel Tax Subcommittee of the longstanding Budget Advisory Committee.  The CAC was first created by the Board 4 years ago as part of the last parcel tax measure for various purposes, among them (a) to determine if the trigger for levying the Measure E emergency tax was met; (b) to provide advice on whether to levy some or all, or increase, the Measure B tax based upon consideration of whether the District needed the funds to provide its educational program; and (c) to serve as a resource to the Board by preparing a longer term trend analyses of the budget.  Measure E no longer exists.  The proposed new Parcel Tax Subcommittee will serve the remaining purposes.

• Why is the number of independent citizen oversight members reduced from “at least 7” to as few as 3, while the parcel tax is expected to continue to increase?

It is the quality of the participating citizens, not their numbers, that matters.  In my experience, both the CAC and Citizens Oversight Committee for the Seismic Bond had difficulty in obtaining sufficient volunteers able to commit  the time necessary to serve on the Committees.  Fortunately, some citizens have been willing to serve multiple terms rather than rotate off the Committees, but that has not served the purpose of obtaining different citizens’ viewpoints as well as I would have liked.  Setting the number of the Parcel Tax Subcommittee between 3 and 5 seems likely to ensure a sufficient number to provide diverse viewpoints and collaboration in the work.

• Why will former District staff members be permitted to serve on the subcommittee?

There is no good reason to exclude former District staff members who live in Piedmont and pay the School Support Tax from the Parcel Tax Subcommittee.  They have no personal conflict of interest as the current budget of the District no longer benefits them.  If a former District employee meeting those requirements wants to serve, they are entitled to express their view as a taxpaying Piedmont citizen as much as anyone else.

• How can the parcel tax oversight group be a subcommittee under the BAC  and at the same time report directly to the Board of Education?

The proposed Resolution provides that the Parcel Tax Subcommittee reports directly to the Board.  The Subcommittee will provide its report to the Board and one of the Subcommittee members will present the report at a public Board meeting.  It is a BAC subcommittee in that its members must be members of the BAC, and thus have made a commitment to be educated about the Districts finances and budget.  However, being a BAC subcommittee does not block its reporting to the Board.

•  How can a determination on the need for a levy and 2% annual increase occur without an independent review of the budget?

The Board of Education, whose members are elected by the vote of Piedmont residents, makes the determination whether there is a need to levy the base tax and whether to levy an up to 2% annual increase.  The Board members independently review the budget.  In addition, the Parcel Tax Subcommittee members will independently review the same information and provide advice to the Board about the levy. Thus your assumption that there is no independent review of the budget is mistaken.

• Why will the CAC no longer exist as an independent body permitted to acquire information on the need for the $9.5 million tax obligation?

The CAC is simply the name given to the citizens’ advisory committee regarding the current parcel tax.  The Parcel Tax Subcommittee will be the name given the citizens’ advisory committee under the proposed resolution.  The Parcel Tax Subcommittee is an independent body just as the CAC has been–a group of citizens, who commit to being informed, who will provide advice to the Board.  The key difference is that the Parcel Tax Subcommittee members will be members of the Budget Advisory Committee, who have thereby committed to attending the BAC meetings to learn about the District’s budget.  BAC members have always had the right to ask questions about the budget, and still will have that right.  Moreover, I note that the District’s budgets, and presentations about them, are available to the public on the District’s website.

• Why will the Board President and Vice President approve nominees, rather than a review by the entire Board and the usual public hearing process?

The Board President and Vice President reviewed and approved the proposed members of the CAC and are proposed to perform the same function for the Parcel Tax Subcommittee members.  There has never been any public comment or Board dissent with respect to the members of the CAC or the Citizens Oversight Committee for the Seismic Bond.  As I previously noted, to my knowledge, we have never turned away any volunteer who was able to make the time commitment from either committee.  No one on the Board felt a need to have the Board as a whole review and approve the volunteers rather than to delegate that task to President and Vice-President.

• What is the distinction in “resident of Piedmont” (BAC qualification)  and Piedmont “homeowner” (parcel tax subcommittee qualification)?

A Piedmont homeowners will pay the School Support Tax if the measure passes whereas a Piedmont resident who rents a place to live does not.  The goal was to have those who pay the tax on the Parcel Tax Subcommittee.

• Previous CAC membership has generally been for multiple years, while the proposed change requires an application be made annually.  Will continuity be lost and require an increased learning curve?

Because Parcel Tax Subcommittee members will be BAC members, they all should have the necessary information about the District’s finances and budget, and the State’s system of education funding, to perform their function.  This is one of the key benefits of having the Parcel Tax Subcommittee be members of the Budget Advisory Committee.  Moreover, annual applications may result in a diversity of viewpoints due to the shorter term whereas the experience with multi-year commitments is that we have very few volunteers for the committees.

• What is the meaning of  ”determine” in the ballot measure language? What will the subcommittee’s role be in determining the tax levy?

The proposed Resolution says “report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy.”  That is simply setting the meeting at which the Parcel Tax Subcommittee is making its report.  The determination whether to levy the base tax, and whether to increase the tax by up to 2%, will be made by the elected members of the Board of Education.  The Parcel Tax Subcommittee, like the CAC now, will provide advice to the Board, but, like the CAC now, will play no role in determining the levy.

Richard Raushenbush, President, Piedmont Board of Education

Will Decisions on Oversight Procedures, Appointments, and Charge Be Taken Out of the Board’s Hands?

Piedmont Civic Association (PCA) readers have raised a number of questions regarding the proposed demise of the School District’s independent Citizens Advisory Committee (CAC), which since 2010 has studied and analyzed the school parcel tax levy and reported its findings directly to the School Board. The CAC has consisted of 7 to 10 Piedmont residents, appointed by the School Board, who have provided vigilant oversight of parcel tax expenditures.

Under the proposed school parcel tax ballot measure presented to the School Board by staff on November 14, the CAC will be replaced by a 3 to 5 member parcel tax subcommittee of the District’s Budget Advisory Committee (BAC).  The BAC currently consists of up to 32 members, including School District employees, union representatives, and parents.

While the BAC is open to the general public, the District Superintendent selects the Committee members. According to the Board resolution, parcel tax subcommittee nominees will be “identified” (presumably from BAC members) prior to being “approved” by the School Board President and Vice President.  The process required by the resolution has the potential effect of limiting subcommittee members to persons selected by the Superintendent and allowing District staff to participate in the selection of their own oversight.

Unlike the CAC, former District staff members may serve on the parcel tax subcommittee (provided they are Piedmont homeowners).  

A More Limited Charge?

 The CAC’s current charge is not only to advise on the tax levy, but also to:

“. .  . help review and project the financial needs of the PUSD with respect to the levy”

“conduct an independent examination of the District’s budget”, and

submit an annual report on “The amount of funds collected and expended from the proceeds of school parcel taxes  . . .” and

“a high level, comprehensive analysis of the District’s budget, including relevant metrics, historical trends, and comparisons with similar school districts, that provides an analytical basis for the Committee’s recommendations.” 

See charge.

In contrast, the language of the proposed parcel tax ballot measure creates a “parcel tax subcommittee” with a more limited charge, without the option to adjust or expand that charge through Board action over the next 8 years:

“. . . review School Support Tax uses and report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy.”

At the November, 14, 2012 Board meeting, School Superintendent Constance Hubbard proposed the changes to the CAC structure, stating she felt staff time would be saved by reducing  the number of required Brown Act notices and avoiding duplicate staff presentations.  Reasons for the limited charge, reduced number of members, and altered selection procedures were not offered or discussed at the meeting. The proposed ballot measure language basically takes decisions on the Committee composition, appointment procedures, and charge out of the Board’s hands. 

Questions to the School Board regarding the proposed change of the Citizens Advisory Committee to a Parcel Tax Subcommittee: 

• Why does the Board resolution propose to significantly and permanently reduce the CAC’s charge?
• Why is the number of independent citizen oversight members reduced from “at least 7” to as few as 3, while the parcel tax is expected to continue to increase?
• Why will former District staff members be permitted to serve on the subcommittee?
• How can the parcel tax oversight group be a subcommittee under the BAC  and at the same time report directly to the Board of Education?
•  How can a determination on the need for a levy and 2% annual increase occur without an independent review of the budget?
  
• Why will the CAC no longer exist as an independent body permitted to acquire information on the need for the $9.5 million tax obligation?
• Why will the Board President and Vice President approve nominees, rather than a review by the entire Board and the usual public hearing process?
• What is the distinction in “resident of Piedmont” (BAC qualification)  and Piedmont “homeowner” (parcel tax subcommittee qualification)?
• Previous CAC membership has generally been for multiple years, while the proposed change requires an application be made annually.  Will continuity be lost and require an increased learning curve?
• What is the meaning of  “determine” in the ballot measure language? What will the subcommittee’s role be in determining the tax levy?

 Proposed ballot measure language:

“(e) Parcel Tax Subcommittee: An annual written report shall be prepared and submitted to the Board of Education by the School Support Tax Subcommittee (“Subcommittee”) of the Budget Advisory Committee (“BAC”). All residents of the Piedmont Unified School District are eligible to apply for membership on the BAC on an annual basis. Members of the Subcommittee must be homeowners in the Piedmont Unified School District community and subject to the School Support Tax and not current employees of PUSD. Each year there shall be no fewer than three (3) and no more than five (5) volunteers identified by November of each year to serve on the Subcommittee. It is the responsibility of the District Superintendent or designee to verify eligibility of the volunteers. The President and Vice President of the Board of Education shall approve all nominees to the Subcommittee. The Subcommittee shall work directly with the Chief Business Officer of the District to review School Support Tax uses and report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy. Members of the Subcommittee commit to regularly attend meetings of the BAC.”

Very Low Income Residents Who are Blind, Disabled or Over 65 Exempt from Parcel Tax-

New language in a  resolution to be voted on by the Piedmont School Board on November 28 substantially expands the exemption from the proposed new school parcel tax.  The revised resolution contained in the November 28 School Board packet now covers all persons on Supplemental Security Income for any reason.  The exemption will be available to low- income residents who are blind, disabled, or over 65.

The resolution language previously presented to the Board on November 14 offered a narrower “disability” exemption which applied only to residents who were both low income and disabled.

The new SSI exemption is still discretionary, rather than mandated.  If made available by the District, eligibility will be established by the taxpayer’s annual “SSI Award” letter from the local Social Security office.  In 2012, SSI was limited to those with less than $1,010 of gross monthly income.  Earned, unearned, in-kind, social security, and deemed income, as well as assets, are considered, making it unlikely that many Piedmont residents, even seniors on fixed incomes, would qualify.

A “senior” exemption to the school parcel tax based on age will not be included in the draft resolution. 

11-28-12 Proposed Resolution Language 

Parcel Tax Exemptions: Homeowners who are residing on their property and qualify for Supplemental Security Income (SSI) may be exempt. This could apply to adults who are blind or disabled, with limited income and resources, as well as to people 65 years of age and older without disabilities who meet the income limits prescribed by SSI. Individuals seeking such exemption must submit an application to the District, including proof that the individual has been determined to be eligible for SSI by the Social Security Administration, on or before July 1 of each tax year. The District shall provide a list to the Tax Collector on an annual basis, on or before a date established by the Tax Collector of each year, of the parcels which the District has approved for the SSI Exemption, as described herein.

See full resolution in 11-28-12 packet

Permanent tax abandoned; “low income” exemption becomes  SSI “disability” exemption –

After concerns were raised by the League of Women Voters and other residents, the Piedmont School Board veered away from plans for a permanent (“evergreen”) school tax and, at its meeting on November 14, directed staff to draft a ballot measure proposal for an 8-year tax which authorizes annual increases of up to 2%.  

The draft tax plan eliminates the current independent citizens oversight committee (which will be absorbed into the Budget Advisory Committee), designates the Superintendent to identify and qualify BAC members to serve on a newly created BAC “parcel tax sub-committee”, and removes previous restrictions on use of the parcel tax funds.

The November 14 draft allows an option to offer an exemption to Piedmont residents who are both low-income and disabled and qualify for SSI Disability.  The draft language does not provide for the low-income exemption discussed and supported by 4 Board Members at the meeting and does not make a Disability exemption mandatory.

The tax levy will not automatically decrease if previously lost state or federal funding is restored to California schools in the future. 

The final ballot measure language is scheduled to be approved at a Special Board  of Education Meeting on Wednesday, November 28, in the City Council Chambers starting a 7:00 pm.  Input should be offered prior to this meeting.  See email list below of School Board Members & Superintendent.  Click here to send email to all School Board Members.

Summary of Draft Resolution

• 8 year term (not permanent)
• Up to 2% increase per year
• Independent oversight committee abolished
  • The current Citizens Advisory Committee (CAC) will become a Parcel Tax subcommittee of the Budget Advisory Committee (BAC).
  • The Superintendent will verify eligibility of the 3 to 5 Parcel Tax subcommittee members, who must be Piedmont homeowners and approved by the School Board President and Vice-President. (The CAC currently must have at least 7 members and generally has 9-10 members.)
  • The BAC is a committee consisting of staff, teachers, union representatives and parents chosen by the Superintendent.
  • Current District staff members are excluded from the sub-committee, but not former stafF
• As is current School Board practice, no mailed written notice of 2% increases to property owners will be provided.
  
• SSI Disability Exemption (not senior; not solely low income)
  • Homeowners will qualify for a PUSD tax exemption only if they are disabled and have very limited income and assets as defined by Supplemental Security Income (SSI).  Low income residents eligible for SSI based on age (over 65) will not receive a PUSD exemption under the resolution presented to the Board on November 14.  In response to a question, the Superintendent asserted that low-income residents who are blind (a separate SSI eligibility category from “disability”) would qualify for the PUSD exemption.
  • The Board acknowledged that few homeowners would qualify for the PUSD exemption.
  • Providing this exemption is discretionary, rather than mandated.
• Two School Board meetings to determine levy and up to 2% increases
  
  • At its first meeting in January, the Board will hold a public hearing to determine if the tax levy shall be maintained, decreased, or increased up to 2%.  At a following Board meeting it will vote on the resolution.
    

Homeowners attempting to determine their total school tax obligations can find their additional school bond assessments in the left column of their Alameda County tax statement.  Unlike Piedmont school bonds, however, the tax deductibility of the $2,000 to $3,500 school parcel tax may be in question, depending on current and future State and Federal regulations:  parcel taxes that vary by parcel size may not meet the IRS “like rate” requirement for deductibility.  (See Article).

PIEDMONT TAXES                                     AMOUNT                  INCREASES       TAX DEDUCTIBLE STATUS

• School bonds                               up to $146 per $100,000               0%                             DEDUCTIBLE
• School parcel tax                                $2,021 to $3,678                  up to  2%                                  ?
• City parcel tax                                         $342 to $576                  CPI up to 4%                              ?
  
• Sewer parcel tax                                     $471 to 849                    CPI w/o limit                              ?
  
• Private undergrounding                             $2,000+                           0%                                      NO

Excerpts from Draft Resolution Language

“Parcel Tax Exemptions: Parcels owned and occupied by individuals who receive Supplemental Security Income for a Disability, regardless of age, may be exempt from the tax.”  (Disability will include blindness per Superintendent Hubbard.)

“(e) Parcel Tax Subcommittee: An annual written report shall be prepared and submitted to the Board of Education by the School Support Tax Subcommittee (“Subcommittee”) of the Budget Advisory Committee (“BAC”). All residents of the Piedmont Unified School District are eligible to apply for membership on the BAC on an annual basis. Members of the Subcommittee must be homeowners in the Piedmont Unified School District community and subject to the School Support Tax and not current employees of PUSD. Each year there shall be no fewer than three (3) and no more than five (5) volunteers identified by November of each year to serve on the Subcommittee. It is the responsibility of the District Superintendent or designee to verify eligibility of the volunteers. The President and Vice President of the Board of Education shall approve all nominees to the Subcommittee. The Subcommittee shall work directly with the Chief Business Officer of the District to review School Support Tax uses and report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy. Members of the Subcommittee commit to regularly attend meetings of the BAC.”

~~~~~~~~~~~~~~

“Proposed parcel tax amounts:

Parcel with Single Family Dwelling:

0-4,999 sq. ft. lot $2,088/parcel
5,000-9,999 sq. ft. lot $2,373/parcel
10,000-14,999 sq. ft. lot $2,706/parcel
15,000-19,999 sq. ft. lot $3,107/parcel
more than 20,000 sq. ft. lot $3,547/parcel

Parcel with Multi-Family Dwellings:
Multi-family dwellings/unit, all lot sizes) $1,389/unit

Multiple Parcel Dwellings: $2,281/dwelling

Commercial Property:
0-10,000 sq. ft. lot $3,547/parcel
Commercial lots greater than 10,000 sq. ft. $5,305/parcel

Undeveloped Parcel $1,059/parcel

The uses and sizes of all parcels shall be determined according to the records of the Alameda County Tax Assessor. For parcels divided by Tax Code Area lines, the payment for the portion of the parcel within the Piedmont Unified School District shall be the same as the above square footage rates.”

Read the entire resolution prepared for the November 14, 2012 Board meeting.

Contact School Board Members and Superintendent:

• Richard (Rick) Raushenbush
  President rraushenbush@piedmont.k12.ca.us
• Andrea Swenson
  Vice President aswenson@piedmont.k12.ca.us
• Sarah Pearson   spearson@piedmont.k12.ca.us,
• Ray Gadbois  rgadbois@piedmont.k12.ca.us
• Roy Tolles  rtolles@piedmont.k12.ca.us
• Connie Hubbard,  Superintendent, Piedmont Unified School District chubbard@piedmont.k12.ca.us

Updated 11/19/2012

Will the State Turn a Blind Eye over the Next 8 Years?

Many California residents take their entire County property tax bill as a tax deduction, ignoring the question of whether some parcel taxes and assessments may be non-deductible.  But in the future this could lead to Piedmont residents receiving a “Notice of Additional Tax Due”.

While Piedmont School Bond assessments are clearly tax deductible, the proposed new 8-year Piedmont school tax and other city parcel taxes may not be:  they potentially fail the IRS “like rate” requirement for tax deductibility.  A recent IRS opinion letter states:

“Assessments on real property owners, based other than on the assessed value of the property, may be deductible if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority’s jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges).”

The California State Franchise Tax Board (FTB) currently tends to overlook errors in property tax deductions for unaudited returns, but may take a more aggressive posture to limit deductibility as the State searches for new sources of revenue.

In 2011, the FTB posted strict new tax guidance on its website and planned to include 3 new lines on 2012 returns:  require California residents to identify their parcel number, “deductible” property taxes, and “non-deductible”property taxes.  While this new guidance was abruptly withdrawn after receipt of an IRS opinion letter rejecting the FTB’s overly narrow construction of deductibility, the FTB website indicates future limits are still on the table:

“We have removed material from our website that limits the deductibility of real property taxes to taxes imposed on an ad valorem basis. Once the IRS forms and instructions are revised, we will provide revised California forms and instructions that are consistent with the revisions made by the IRS.”

The FTB stopped short of telling everyone they can deduct their entire property tax bill and at some point intends to halt the improper deduction of all property taxes in order to capture an estimated $200 million in new tax revenues.

An aggressive stance by the FTB could not only impact the deductibility of Piedmont’s proposed 8-year school parcel tax of $2,000 to $3,500, but other city parcel taxes that are also based on parcel size (see below).

The State has a strong pecuniary interest to interpret the term “like rate” as narrowly as possible.  Residents could eventually end up with an automatically generated Notice of Additional Tax Due (based on their property location and jurisdiction) for deducting parcel taxes improperly.  This would increase the effective cost of Piedmont’s non-deductible parcel taxes substantially.

PIEDMONT TAXES                                 AMOUNT                  INCREASES            TAX DEDUCTIBLE?

• school bonds                               up to $146 per $100,000               0%                           YES
• school parcel tax                                $2,021 to $3,678                      5%                                ?
• city parcel tax*                                       $342 to $576                   CPI up to 4%                    ?
  
• sewer parcel tax*                                   $471 to 849                      CPI w/o limit                   ?
• private undergrounding                             $2,000+                           0%                            NO

*May be tax deductible in whole or in part, depending on the extent to which revenues can be shown to be expended on repairs, maintenance or related interest expense.  Property taxes that cannot be deducted may be added to the basis of the property, if they tend to increase the value of the property.  Future school bonds are anticipated up to $146 per $100,000. The exact amount has not yet been determined. The legal limit is ~$146-$155 per $100,000 of assessed value.

Resident objects to proposed parcel tax structure-

November 16, 2012

Dear School Board Members:

I attended Wednesday night’s meeting and was pleased with the free exchange of decidedly held opinions about the proposed new school parcel tax.  Your decision to limit any new tax to an 8-year duration is a positive move.

Piedmont can be justifiably proud of the quality of its schools and I think that almost everyone at the meeting was strongly supportive of keeping the schools adequately funded.  I am in that group.

I was surprised that the issue of our current tax structure and its regressive nature, both addressed by my previous email to the board and expressed by others, was not included in the discussion. Although the to-be-implemented SSI exemption in the new tax is largely symbolic, it does recognize those on limited incomes which is a burden that falls disproportionately on seniors.

I think that perpetuating the inequitable and regressive method of a flat dollar amount of tax by tiered property size is wrong.  Let me demonstrate from the rates being proposed for single dwellings which will be voted upon in March 2013:

          DWELLING LOT SIZE     PROPOSED TAX

• 0 – 4,999 sq ft                                                $2,088 per parcel
• 5,000 – 9,999 sq ft                                          $2,372 per parcel
• 10,000 – 14,999 sq ft                                      $2,706 per parcel
• 15,000 – 19,999 sq ft                                      $3,107 per parcel
• More than 20,000** sq ft                                $3,547 per parcel

(** This should read “more than 19,999 sq ft” or “20,000 sq feet or more”.  As written, 20,000 sq ft lots are technically not included.)

This means that:

•   4,500 sq foot lots will pay $0.464 per square foot.
•   7,500 sq foot lots will pay $0.316 per square foot.
• 10,000 sq foot lots will pay $0.271 per square foot.
• 12,500 sq foot lots will pay $0.217 per square foot.
• 15,000 sq foot lots will pay $0.207 per square foot.
• 17,500 sq foot lots will pay $0.178 per square foot.
• 20,000 sq foot lots will pay $0.177 per square foot.

In other words, a 4,500 sq foot lot will pay 2.62 times the rate of a 20,000 sq foot lot.

As an aside, I believe that the smallest lot in Piedmont is about 2,000 sq ft and the largest is over 80,000 sq ft.  The tax rate difference between these two extremes (1.04 vs 0.04 cents) is astounding:  26 times!

I fail to see the equity in this perpetuation of the status quo.  This is nothing more than a regressive tax on the smallest sized lots in Piedmont which are most probably owned by people with a lower income base.  Why should smaller sized lots effectively subsidize much larger sized ones?

Equitability would be served if a square footage rate of between 22 and 27 cents was adopted.  I base this on a back-of-the-envelope calculation assuming a $9.5 million tax revenue target from 3,750 lots with approximately 34.4 million total square footage.

I disagree strongly with your decision to effectively not provide a full or partial voluntary senior exemption.  The age at which a homeowner is eligible for Social Security is an objective measure.  A member of the board advanced the argument that Prop 13 is the senior exemption.  It is an unwarranted assumption that everyone over 65 has paid lower property taxes because of Prop 13. Those properties with Prop 13 advantaged tax rates belong to residents who have maintained property ownership stability for more than 30 years (Prop 13 was adopted on June 6, 1978).  Is not “stability” a desired outcome of lengthening the time before school parcel taxes are submitted for a new vote? Why is it a negative when it comes to length of home ownership?

Over these 34 years, all homeowners have paid a full slate of school parcel taxes as assessed and many of these same citizens have not used the Piedmont school system while paying these taxes.  Are they now to be penalized for living here a longer time and paying more school parcel taxes than people who do not have similar residency and may pay higher property taxes?

Please don’t incent people to work against what is essentially a good thing by not adopting a more fair and equitable approach.

Thank you.

Jim McCrea, Piedmont Resident

Editors’ Note: The opinions express are those of the author and not necessarily those of the Piedmont Civic Association.

Letter to School Board Members:

Comments on Proposed School Parcel Tax Measure

Dear President Raushenbush and members of the Board of Education:

The League of Women Voters of Piedmont appreciates this opportunity to provide comments as you develop the school parcel tax proposal this month. On November 7, Katy Korotzer briefed our Board members on various options you are considering. Her presentation and insights were very helpful. To the League, the most significant issue seems to be the term of the tax: whether it should again be four years, “permanent,” or perhaps something in-between.

When the League decides whether to take a position on a ballot measure, the Board looks to the League’s formally-adopted policy positions and weighs all that apply. Education has been a high priority for our League at least since 1948, when it decided to “[s]upport a high level of education within the Piedmont Unified School District.” Based on this position, the League has
endorsed every school bond and tax measure within memory. However, the League also has a strong statewide position in favor of including sunset
provisions in all dedicated tax measures (LWVCalifornia Position on State and Local Finances, paragraph 4h).

During the just-past election, the Leagues of Alameda County declined to endorse the county-wide transportation tax measure precisely because it would have implemented a permanent tax. The League adopted a “neutral” stance.

When the LWVP Board evaluates the school tax ballot measure, it will have to weigh both of these positions in deciding whether to support, oppose or remain neutral.

We understand the Board of Education’s desire to avoid the uncertainty and expense of seeking ballot approval of the parcel tax every four years. We urge you to consider the alternative of perhaps an eight-year tax.

Our members suggested several reasons why this might be a reasonable term, and better than a permanent tax. First, conditions change: State funding, the composition of the Board of Education, the district administration, and the very nature of education might well change significantly over the next couple of decades.

Second, having a school parcel tax on the ballot makes the whole community focus attention on the schools and their current issues, which seems to be a good thing.

Finally, if “only” eight years have passed since the last school tax ballot, there should still be “community memory” about how to rally the public to get the tax passed. A longer term would make this more problematic.

Thank you for this opportunity to give our perspective. We will be following
developments closely. We appreciate all you are doing for the schools and our community.

Very truly yours,

Julie E. McDonald
President, LWVPiedmont

cc Constance Hubbard, Superintendent
Katy Korotzer

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  

. . . Or a 2% Annual Escalator?

The Piedmont School Board has requested public input before its next meeting on Wednesday, November 14, on a new draft resolution for a permanent (“evergreen”) school parcel tax to which the League of Women Voters has expressed objections. The primary decision on the 14th will be whether to propose a measure to approve a flat permanent tax . . . or a permanent tax with a 2% annual escalator.  Another important decision will be whether to abolish the Citizens’ Advisory Committee (CAC) as an independent oversight entity.  Final revisions to the permanent tax resolution will made on Nov. 14 to allow staff to prepare language for a final vote on Nov. 28. (Further details.)

Click here to send email to all School Board Members.

A second draft resolution, for an additional emergency tax in case Proposition 30 failed, has been dropped following the passage of Prop. 30.

Draft Resolution

• PERMANENT  TAX of $2,088 – $3,547 per parcel  (no voter approval required in the future ) two public School Board hearings prior to Board determination of tax levy
  
• FLAT OR UP TO 2% ANNUAL ESCALATOR  (to be decided by Board on Nov. 14)
  • no increased written or public notice to taxpayers of proposed increases
  • continue existing notice at two public School Board hearings prior to increases
• LOW INCOME EXEMPTION BASED ON SSI INCOME LIMIT
• RESTRUCTURE INDEPENDENT CITIZENS’ ADVISORY COMMITTEE (CAC)
  
  • Convert to subcommittee of the Budget Advisory Committee (rather than totally independent oversight committee)
  • Members appointed by Board President and Vice President
    
  • Limit to 3-5 members (rather than at least 7)
  • Allow past district staff (who are residents of Piedmont)

A Close-Up Look at Piedmont School Finances

• Part 1:  A $1 Million Problem – Temporary or Ongoing?
• Part 2:  Piedmont Parcel Tax Facts
• Part 3:  Piedmont Schools Face a Quandary
• Part 4:   The Ongoing PUSD Deficit

School Board Members:

• Richard (Rick) Raushenbush
  President rraushenbush@piedmont.k12.ca.us
• Andrea Swenson
  Vice President aswenson@piedmont.k12.ca.us
• Sarah Pearson   spearson@piedmont.k12.ca.us,
• Ray Gadbois  rgadbois@piedmont.k12.ca.us
• Roy Tolles  rtolles@piedmont.k12.ca.us

Updated 11/13/3012