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As School Funding Crisis Mounts, Prop 13 Critics Will Crank it Up Again

With the State of California threatening cutbacks to education funding, and local AUSD board members pushing for new parcel taxes, we can be sure that the critics of Proposition 13 will be heating up their rhetoric. But Prop 13 might not even be fully to blame for the school funding problems, and repealing it may have un-intended side effects.

The first thing to understand is that the chief beneficiaries of changes to Prop 13 or a repeal of Prop 13 might not even be the schools, but rather, some 400+ municipal redevelopment agencies all across the state of California that would get a boost in their tax-increment revenues which they use to subsidize developers.

In the fiscal year 2006-2007 (the 2007-2008 State Controller’s Report is not available at the time of this writing), California’s redevelopment agencies reported $10.6 billion in revenue, primarily from property taxes and interest on those property taxes, and the total land value of all redevelopment land in California was $584 billion. Changing Prop 13 to allow property tax increases on that $584 billion would be a boon to developers and redevelopment agencies in California – not to schools.

Now let’s turn to a little discussed lawsuit back in the 1970s which shaped the current education funding system we see in California today. In Serrano v. Priest, the California Supreme Court found that the state’s property-tax-based education funding system through to the sixties violated equal protection principals. Poor communities had to have high tax rates just to achieve low per-pupil revenue, and wealthy communities had low tax rates while generating higher per-pupil tax revenues. The Court ordered the state legislature to change the way that schools were funded.

Serrano I was in 1971, and Serrano II was in 1976. After Serrano I, Senate Bill 90 in 1972 established revenue limits to cap the amount of tax money that each district could receive on a per-pupil basis. This was an attempt to equalize, on a per-pupil basis, the amount of money that districts received across the state, whether wealthy or poor. This shifted control of school finance from local agencies to the state.

After Serrano II in 1976, the California State Legislature passed Assembly Bill 65 to introduce annual inflation adjustments to the revenue limits to better keep wealthy and poor districts within a narrow band of per-pupil revenue. Proposition 13 wasn’t passed by California voters until 1978.

The Merrow Report suggests that the Serrano decisions and subsequent actions by the legislature “actually led to lower school spending for most poor children.” It also suggests that they may have led to the property tax revolt of 1978, which resulted in Proposition 13, because increased property taxes wouldn’t necessarily go to help local schools. (You can read some more background on the Serrano and Prop 13 history here.)

In 1998, Proposition 98 guaranteed a minimum funding level from state and property taxes for K-12 schools. This pretty much completed the transfer of control of education funding from local districts to the state.

So, because of Serrano, and the subsequent revenue-cap equalization measures enacted by the state legislature, repealing Prop 13 won’t necessarily mean more money for our local schools. Much of the new property tax revenue will go to redevelopment agencies, and revenue limit formulas won’t necessarily direct all of our increased property taxes back into our local schools. We encourage citizens concerned about school funding to dig a little deeper past the rhetoric about Prop 13 into the impacts of the Serrano decisions, and start asking who is really behind the push to change Prop 13.

2 comments to As School Funding Crisis Mounts, Prop 13 Critics Will Crank it Up Again

  • barb

    Don’t forget that all things are not equal. The per pupil ADA is based on decades old figures- based in part upon what each district was contributing to its schools at that time. Since Alameda and Oakland had the military, those two cities received millions from the federal government annually. Therefore what the cities were actually paying was much less than other cities. New districts such as Pleasanton and Dublin were paying relatively higher amounts as they were newer and were just developing. That was factored into the ADA computation. So when the military bases closed 12 years ago, the ADA computation was never changed to account for those lost funds. Our elected officials claim to suppport schools, but have never een able to get it together to force an equal per pupil payment for each child throughout the state. And we had both the top senator and Assembly person in the form of Don Perata and Wilma Chan. So rather than make our elected officials do their jobs, which is impossible, we are forced to pass parcel tax after parcel tax just to play catch up with the other cities in our own county!

  • AUSD Board Member Ronald Mooney prefers to pass parcel taxes to lobbying our legislators in California. If you read the Public Policy Institute of California report on school funding in California, you will see that they note that prevalence of strong legislators pulling greater state funding for their local schools.

    Also note that Lt. Gov. Garamendi’s daughter lives in Alameda and is active in the AEF, and worked hard to push for Measure H, rather than pushing the state legislators to equalize funding for Alameda.