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Guest opinion: Redevelopment agencies siphon funds from schools (from online archive)
Original post made
on Mar 19, 2011
What do all the arguments about Gov. Jerry Brown's plan to take funds from redevelopment agencies, including Las Pulgas in Menlo Park, have to do with us?
Read the full story here Web Link
posted Wednesday, March 16, 2011, 12:00 AM
Posted by Jennifer Bestor
a resident of Menlo Park: Allied Arts/Stanford Park
on Mar 20, 2011 at 12:07 pm
Jennifer Bestor is a registered user.
Paul, thanks for your thoughtful questions.
First of all, I agree with you completely that Prop 13 caused unusual behaviors by local and state governments, along with a series of subsidies (e.g., residential to commercial) that make no sense. A thoughtful revision of the state's tax structure that protects older homeowners without creating a wildly uneven playing field for businesses and young families would curb lots of bizarre tax-driven behavior.
Second, please look at the diagram attached to the article. A picture is supposed to be worth a thousand words but it's worthless if no one looks at it! You will see the exact proportions of tax that would go to each entity (including the City) if the RDA did not exist, based on the specific TRA (tax-rate area) allocations for each affected area applied to the parcels in that TRA. Included are only the twenty-nine TRAs for the RDA, namely 08-003, -007, -009, … -108. Each TRA allocates a slightly different percentage to the City, around 10% in the RDA area. It is lower than the Menlo Park average you cite because an unusually high percentage (32%+) is allocated to the elementary school district for these TRAs.
Third, yes, the assessment basis within the RDA is limited by the same Prop 13 rules as elsewhere. This contributes to the difficulty in evaluating whether the RDA, in fact, has added extra value. Rapid turnover in a failing neighborhood can easily created higher total assessed value today than in an improving neighborhood where owners choose to hang onto property longer.
As an aside to 'Interested,' the core TRA for Belle Haven is 08-092, which shows somewhat higher appreciation than the rest of residential Menlo which would make it appear that the $175M investment is improving the area however, the percentage of homeowner-occupied single-family residences has dropped from 64% to 49% since 1985. This drop is seen throughout California, but is proportionally twice what is seen in Menlo Park as a whole.
Fourth, Paul, yes, school districts can obtain via parcel taxes what they lose in property tax. But that is what started me down this analytical path. We have (as you note) large parcel taxes here in Menlo Park. And we pay high state taxes, of which something like 40% goes to "education." And, for those of us who didn't own our current homes 25+ years ago, we pay relatively high property taxes, of which (nominally) 17% goes to the schools (in my TRA 08-001 where your old house is, it's 31%). We also contribute heavily to the school PTOs and the Educational Foundation. We pay and pay and pay for our schools but still can't seem to stick our local noses above the national average!
Why? That was what started me, a few years ago, analyzing commercial vs. residential property shifts. Then, when Brown was elected, he went after RDAs. ?!! If anyone understands the post-Prop 13 revenue landscape, it has to be Jerry Brown. So I looked at ours. And this is what I found.
Furthermore, while my chart shows the Menlo RDA effects on all the underlying districts (Redwood City, Ravenswood, Sequoia and MPCSD), what you won't see are the effects from all the other RDAs on them Sequoia, for example, has six others in their district. Ravenswood has three. Redwood City two. I would love to include the full data for each, but am still waiting to hear from the RDA authorities on their pass-backs. (The staff in Menlo Park has been very responsive.)
I hope I am making some progress convincing you, Paul, that RDAs conceived in the tax environment of 1981 are having a direct negative effect thirty years later on our school children. Worse yet, they are contributing to state spending that is uncontrollable without punishing even more school children.