redqueeninla ~ a musings locality

On June 4, 2019 at the polls, we’ll approve fairly funded Public Education for all by voting YES ON EE. It’s a gift to democracy from the body politic. See here.  https://tinyurl.com/howcorporatematchingworks

In the meantime large corporations and industrial landowners have launched a stunning reveal of Big Business As Scrooge.  They’re sabotaging the rest of us, fueling a deluge of anxiety on social media. Guess what? The questions evoked have straightforward answers:

(1)  WHAT about the lottery?

Experts say:  “Perhaps the biggest misunderstanding about California’s lottery comes down to the false impression people have about its role in funding our schools. … [Because it turns out,]… Well, the lottery doesn’t provide very much to K-12 schools.”

About 20 cents on the dollar goes to K-12 schools for a total of $1 billion dollars a year — actually a drop in the bucket of CA education funding.  The vast majority goes into the pockets of the businesses that sell the tickets and maintain the machines and the lotto system — and the tickets are mostly bought by residents of low-income neighborhoods.  Since a change in the law in 2010, ticket sales have gone up and returns for schools have gone down.  More here:  laist lottery big money small returns.  https://laist.com/2018/06/19/lottery.php

It’s smarter not to send Education dollars to Sacramento but to keep it right here locally, under our own citizen’s watchful eyes (see #7 below).

(2)  Didn’t we already increase our taxes for education?

Temporarily — yes.  In the wake of the Great Recession, we saved our schools with Prop 30 which raised taxes from 2012-2018 on individuals making over $250K (joint filers making over $500K).  A 0.25% sales tax increase ended in 2016.  An extension of the income tax on the wealthy was passed in 2016 (Prop 55) and will last through 2030.  With that assistance, California’s spending on education rose a little but remains in the bottom 20% of all states in the union.

Remember when local business leaders “supported” Prop 30? Remember when the opposite turned out to be true? See here.  https://tinyurl.com/darkmoney4kids What if this is happening again? This measure has made for some very strange bed-fellows.  https://tinyurl.com/commoncause4EE. But that shouldn’t affect support for properly funding public education. Fair is fair.

(3)  What about all those other huge sources of education funds?

Meaning possibly …

• • • Title I (poverty) federal funding?  It weighs in at only about 4% of the General Fund budget.
    • Funds earmarked for ‘Special education’?  Special education is consistently underfunded relative to the federal mandates. Worse, that scarce money is shrinking relative to the increasing identified needs of our kids.
    • Bond monies?  It’s only for facilities and tech.  Bond money can’t be spent on the classroom and staffing costs such as mandated by a parcel tax.]

(4)  How about I just do Donor’s Choose or give directly to my school through the PTA?

You know what PTAs and booster clubs love?  Matching funds.  Where, instead of busting their butts putting on a Silent Auction or a Walkathon, somebody walks in with a little check and then the company they work for sends in a bigger check.  Measure EE does that:  Homeowners will end up contributing 30% of the proceeds.  Commercial and industrial property holders are projected to owe 70% of the assessments in the measure.  That’s smart money!  Especially since our kids and teachers are in this predicament because commercial and industrial properties haven’t been paying their fair share under Prop 13.  

(5)  Did LAUSD really spend $1.3 billion on iPads? 

No.  The Bond Oversight Committee started asking critical questions and then voted against additional expenditures which put the brakes on the program:  kpcc_boc_no_more_ipads  https://tinyurl.com/ipadoversight

In the end, under $200 million of bond funds were spent, much of it on wireless upgrades to get all schools connected to the internet — a necessary expense in this day and age.  The questioning that got started by the BOC led to inquiries by the Office of Inspector General and the FBI and the resignation of Superintendent John Deasy who, with his inner circle, had excessive dealings with Apple and Pearson outside of the appropriate procurement processes.  A cautionary tale to be sure, that reinforces the importance of independent oversight — which is provided for in Measure EE, more details below.

(6)  Are they just going to waste the money on stuff I don’t think the kids need?

Text of the measure is here:  Measure_EE_Official_Ballot_Text https://tinyurl.com/measureEEtext

Relevant portions:

WHEREAS, the purpose of the parcel tax shall be to maintain and increase programs and services provided by L.A. Unified (PreK-12 schools, adult/vocational/career schools, and early education), including Local Charter Schools, in support of students and local schools. The funds from this parcel tax will be used for the following specific purposes:

1. 1. 1. Lowering class sizes;
      2. Providing school nursing, library, and counseling services;
      3. Providing quality instructional programs, critical school resources and materials;
      4. Retaining and attracting high-quality teachers and school employees;
      5. Providing safe, secure, clean, well-maintained and supportive schools;
      6. Providing schools with necessary administrative services; and
      7. Supporting low-income students, English-learners, foster/homeless students, students with disabilities, students enrolled in high-need or low-performing schools, or otherwise disadvantaged students.

WHEREAS, funding generated by this Measure may NOT be used for:

1. 1. 1. Purchasing school lots;
      2. Building or modernizing schools;
      3. Funding legal settlements and liabilities;
      4. Operating schools outside the boundaries of L.A. Unified.

• • Charters get their “fair share” based on proportion of total enrollment in the District.
  • Exemptions for principal residence of owner who is 65 or over OR on disability/SSI and earning less than 250% of 2012 federal poverty guidelines.
  • The whole shebang expires in 12 years. No extension without a whole new measure going on the ballot again.

(7)  LAUSD isn’t responsible.  Money won’t be spent as promised – it never is!  Who’s watching the hen house??

The Board of Education has passed a resolution with specific requirements for an oversight committee:

Resolved, That the Governing Board of the Los Angeles Unified School District hereby establishes the formation of an Independent Taxpayer Oversight Committee for the purpose of ensuring the proceeds are used and distributed only for voter approved purposes as stated in the full text of Measure EE and to provide an enhanced level of accountability for the allocation and expenditure of Measure EE parcel tax funds as to positively impact student outcomes; 

Resolved further, That the membership of the Independent Taxpayer Oversight Committee shall consist of nine (9) independent representatives with significant expertise in at least one of the following areas: academia, school/public finance, parent and family engagement, and performance measurement and management. Each nominated member shall reside within the boundaries of the District and the membership shall reflect a balance of participants with each of the aforementioned expertise areas;

Also requires open meetings, subject to the Brown Act; rules against conflicts of interest; minimum of one annual report on how money is spent; plus annual audits performed by independent auditing firm; various other requirements at:

Text of the resolution here:  https://tinyurl.com/LAUSDresolutions — type “EE” in the search box labeled ‘Title’ and click on “show resolution”.

(8)  Don’t we already pay too much in property taxes?  Where is it all going??  

The bottom line:  In CA, as in most states, public education is funded via property taxes. 

Since the 1970s, local property taxes go to Sacramento to be divvied up and sent back to local school districts.  This was done to combat the historical inequities between school districts located in wealthy versus low-income communities.  Also in the 1970s, Prop 13 passed assessment limits on residential and commercial properties, keeping property taxes artificially low until a lot changes hands.  This has had paradoxical effects on our tax rates because residential properties change hands more regularly while commercial concerns can use certain business structures to evade reassessments and higher taxes.  In other states, 70% of property tax revenues come from commercial property whereas in CA, the balance is flipped and residential owners provide more of our property tax revenues than businesses do.  

In wealthy communities, residents make up for the resulting shortfalls in education funding by successfully passing parcel taxes:  They agree to tax themselves to benefit their local schools.  This has happened in Burbank, San Marino, South Pasadena, Manhattan Beach, on and on… with the support of the business and real estate interests.  Perhaps because of enlightened self-interest:  better schools mean higher home values and educated kids make more productive employees.

So what does this mean for property owners in LA?  Currently…

• The average effective tax rate for residential owners is only 1.18% on the median-valued home. 

This rate places us 31st out of 50 states. But, 3rd in the nation for actual amount paid.  In CA the amount paid averages around $8K a year.  Why?  Because of high property values.  Living the dream in the golden state costs more than it does in Detroit.

•  Commercial properties’ average effective tax rate for a lot worth $1 million is only 1.19%.  

This rate places CA 44th in the nation. The average rate of industrial properties, which are often bigger than commercial structures, drops to just 0.95%

So…Do you start to see why big business and tobacco, oil and commercial real estate interests are paying for all the negative ads against EE??  

Read all about it here:  tax data  https://tinyurl.com/property-tax-comparisons

The parcel tax will charge 16¢/square foot of living space/developed building.  (Won’t include garages, parking structures, cabanas, sheds). Calculate your annual rate from square footage found here:  http://zimas.lacity.org   (Use the “Assessor” tab but be very careful not to inadvertently include garage or accessory structures in the calculation.)

What does it mean for an average homeowner (who doesn’t qualify for an elder or disability exemption)?  Let’s say a 1500 sq ft home (not counting garage and shed) with an average bill of $8000/year pays 16 cents on 1500 sf – that adds $240/year.  This means the cost for one month will go from $667 to $687.

Meanwhile, the assessor projects that 70% of the proceeds raised will come from commercial and industrial properties and just 30% from homeowners.  80% of rental units in LAUSD territory are under rent control.  So most larger landlords will take on some of those costs rather than pass them directly to renters.  Until 2031 when this sunsets.

(9)  Will it just go to retirement costs?  

Well, the measure (see above) says the proceeds have to be spent on class-size reduction, teachers, nurses, librarians, counselors, custodians, necessary instructional materials (hey!  that could include arts, and music, and career technical education stuff!).  The oversight committee is supposed to make sure of that. 

Whether or not EE passes, because of (i) promises made in the past, (ii) decreasing birthrates (lower enrollments means fewer new teachers paying into the funds vs retired teacher living off their earned pensions), and (iii) the effect of the Great Recession on the state’s investments in the pension funds for teachers and school workers — regardless of passage, the district owes a growing contribution to retirement funds for the next couple decades until it levels off again.  So that’s coming out of the existing money for kids currently in school — no matter what.

But guess what?  Those underpaid, overworked, and now-retired teachers?  Whose teachers were they?  Our teachers!  We none of us sprang fully formed from our parents ready to be dentists or mechanics or realtors or entrepreneurs or family therapists without our teachers.  This is my bill and I think I’m going to pay it for the next 12 years by voting yes on EE.  Cost of feeling like my 911 dispatcher or nursing home attendant will be prepared to help when I need them in a few decades?  Priceless. 

There is reason to be concerned about how tax dollars are spent.  That’s why when we vote to appropriate money – especially for something as important as kids and public Education – every single one of us needs to stay woke about how the money gets spent. The citizen’s oversight committee is an important check/balance. It’s members will need to feel you watching them always.

But our legitimate interest shouldn’t “normalize” throwing out the baby with the bath water. Our kids need these resources. And it’s in everyone’s best interest to approve them.  Big business, Small families, Folks without kids.  Everyone’s.

Vote Yes on EE.  June 4, 2019 or via USPS mail right now if you can!