CVUSD Board to Discuss Possibility of Parcel Tax Survey

Over the past year, the board has had several discussions and presentations regarding a possible parcel tax election to help offset ongoing reductions to state funding for K-12 education (e.g., per student funding, categorical funding) as well as the historical and structural budget deficit that the California budget crisis has created for the district. In 2007-2008, the revenue limit was $5,806/student compared to $5,228/student in 2011-2012. In addition to the reduction to the Revenue Limit, categorical programs have been cut or eliminated.

In August 2011, the board directed the superintendent to develop a list of programs/services with the accompanying costs in preparation for further discussions regarding a possible parcel tax in 2012. Staff will review the actions that have been taken since August regarding a possible parcel tax election, a possible list of programs/services that a parcel tax could fund, and issues that need to be considered before the board can make an informed decision to place a parcel tax on the ballot.

The list of programs/services fall into three broad categories: (1) maintaining existing programs/services; (2) restoring programs/services; and, (3) enhancing programs/services. However, these three categories do not address the historical and structural deficit that the district continues to face due to the California budget crisis or the pent-up demand from four years of budget cuts. Attachment A provides examples of programs/services that fall into each category; however, the categories need to be developed in greater detail prior to moving forward with an election.

Given the ongoing structural budget deficit that the district faces until the California budget crisis is resolved and K-12 educational funding is fully restored coupled with the uncertainty over the 2012-2013 California budget (e.g., budget trigger in December 2011, Proposed January 2012 Budget), maintaining high quality programs/services for all students will continue to be the primary focus of the district budget. While the district has cut or reduced programs/services in recent years, the district has been able to minimize the cuts and reductions by using one-time funding (e.g., ARRA, SFSF, EdJobs), Tier III flexibility, and district reserve funds.

Based on current state budget information and projections, most of the one-time funding will be expended by the 2012-2013 school year and state funding for 2012-2013 is uncertain; therefore, the district needs to find a local source of funding to maintain programs/services in 2012-2013 and beyond at the current level to meet identified student needs. A parcel tax would be a source of local funding, but it cannot and will not be the sole solution to the budget crisis. The district cannot wait for state funding to improve if it wishes to continue providing all students a high quality education.

Without a new source of funding, restoring programs/services will be difficult without making further cuts to existing program/services. Enhancing programs/services will be an even greater challenge without a new source of funding, even though there are clearly identified needs — some which could be funded with a bond.

Before the board can make an informed decision to place a parcel tax on the ballot, the following questions need to be answered:

• Will the voters support a parcel tax?
• What type of parcel tax (e.g., flat, per unit, square footage) will voters support?
• For how many years will voters support a parcel tax?
• For what programs/services will the voters support a parcel tax?
• Are the programs/services supported by voters best suited to a parcel tax?
• At what amount will voters support a parcel tax?
• How much revenue will a parcel tax generate and will that revenue be sufficient to maintain, restore, and/or enhance programs/services?
  • There are approximately 16,000 parcels in the district.
  • Exemptions could reduce the number of taxable parcels.
  • For illustrative purposes only: a flat parcel tax of $59/parcel would generate $944,000 per year prior to any exemptions. At $99/parcel the revenue would be $1,584,000 annually.

The best way to answer these questions is by conducting a voter survey. Without a survey, any decision would be based on speculation, not fact. The information from a voter survey would allow the board to make an informed decision. The survey would either demonstrate the support for or the lack of support for a parcel tax, support for specific programs/services, and the amount voters would be willing to pay. The cost of the voter survey is projected to be approximately $30,000.

In order to generate revenue for the 2012-2013 school year, the election would have to be held prior to July 1, 2012. There are two possible dates on the election calendar: the primary election on June 5 or a Vote by Mail (VBM) election on May 8. In order to call for an election, the board must adopt a resolution no later than 88 days prior to Election Day (Feb. 9 for the May election and March 9 for the June election). A voter survey could be conducted in early January; therefore, a decision to conduct a voter survey does not need to be made until the next regular board meeting on Dec. 8. No action will be taken at this meeting regarding a voter survey.

District funds can be used to pay for the cost of the survey, (approximately $30,000) and the cost of the election (approximately $175,235 plus the cost of translation — Spanish, Chinese, Vietnamese, and Tagalog). District funds, however, cannot be used to pay for the cost of the election campaign.

Financial Implications:
None at this time, but potentially $30,000 to conduct a voter survey

Staffing Implications:
None

Recommendation:
Information and discussion only

For more information, visit the Castro Valley Unified School District's website.