Measure to relax parcel tax vote threshold moving forward

Measure to relax parcel tax vote threshold moving forward

(Calif.) The next step for a state constitutional amendment that would make it easier for school districts and community colleges to pass or extend parcel taxes is a vote of the state Senate, which is likely to occur sometime this summer.

SCA 5, which was introduced earlier this year by a group of lawmakers led by Sen. Jerry Hill, D-San Mateo, would allow passage of a parcel tax with 55 percent of the vote—an adjustment down from the two-thirds supermajority that now governs the levy.

“Despite significant increases in state funding for schools in recent years, districts are struggling to maintain quality educational services and programs amid escalating costs and declining enrollment,” Hill said in a February statement when introducing the proposal. “Teacher layoffs or furloughs and cut programs are among the results.”

As proposed, the amendment would give schools the lower voting threshold but impose oversight conditions aimed at protecting the fidelity of the tax money. Those conditions are:

  • that districts provide voters a list of the specific purposes and programs that are to be funded before the election;
  • that proceeds from the tax be used only for the purposes and programs specified in the proposition; and
  • that the governing board of the school district conduct an annual independent financial audit of how the tax was collected and used.

Virtually the same oversight measures were included in Proposition 39, which lowered the voting requirements on districts to pass school bonds and was approved by voters in 2000.

In the years immediately following passage of Prop. 39, the number of school bond measures approved by voters increased drastically. According to a 2014 report from the nonpartisan Legislative Analyst, just 58 percent of bond measures were approved statewide in 1998; in 2012, voters approved 80 percent of school bonds on the ballot.

Parcel taxes, which are generally a California-only invention, came into use during the 1980s as a result of the prohibition on taxes based on land value—a restriction imposed by the landmark Proposition 13 tax measure.

As a result, parcel taxes are typically applied as a flat rate or are based on parcel size.

According to a 2015 report from the Public Policy Institute of California, school districts placed 329 parcel tax proposals on the ballot between 2003 and 2012. Sixty percent were approved—although the vast majority of those outcomes in limited to high-income communities in the Bay Area. Most of the rest of the state had a success rate of only about 25 percent.

Also, most of the approved measures were extensions. From 2003 to 2012, 197 proposals passed, of which 83 were renewals or increases. Only 114 districts had one or more successful parcel tax elections during this period, according to PPIC.

The author’s office reports that only one in four school districts have ever attempted to get a parcel tax approved and that about one in eight have ever succeeded.

Opponents of SCA 5—which include most of the state’s large anti-tax groups including the Howard Jarvis Taxpayers Association and the California Chamber of Commerce—ague that parcel taxes undermine the protections of Prop. 13 given property owners against higher taxes.

“Nothing in SCA 5 relates to needed reforms in California’s educational structure,” said Jon Coupal, president of the Jarvis Association in a statement. “In fact, it amounts only to throwing more money into a broken system.

“Citizens are right to demand more efficiency and accountability with the billions of dollars in tax proceeds that we pay for education,” Coupal continued “That means incentivizing reforms, not rewarding bad behavior.”

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