On March 7, polls in the Menlo Park City School District will be open, with one question for voters to consider: Yes or no on an annual tax of $360 per parcel that would expire after seven years.
The parcel tax ballot measure may feel like deja vu to voters. It was crafted by the district and its governing board over months of public meetings that followed the failure at the polls of two parcel tax measures less than a year ago, in May 2016.
The new proposal, Measure X, authorizes a tax that would, in effect, replace a $207 parcel tax expiring June 30, resulting in a net increase of approximately $153 a year. To pass, the measure must win approval of two-thirds of the voters.
Because the district has three other parcel taxes (with no expiration dates) total annual parcel tax revenue going to the district would be $1,078 per parcel, plus this year's increase in the Bay Area consumer price index. All the parcel taxes appear as one on the property tax bill.
Those age 65 and older may ask for an exemption from the district's parcel taxes. Those who already have an exemption would have it automatically applied to the new parcel tax. Once an exemption is in place the property owner need not reapply.
Measure X, if adopted, would raise an estimated $2.83 million each year "to be spent only on teachers and essential educational programs," according to the ballot language, and includes provisions for an annual adjustment equal to the Bay Area consumer price index.
The 75-word statement that appears on the ballot says the tax is needed "to protect outstanding public schools; retain high-quality teachers, excellent programs, and reasonable class size; avoid teacher layoffs; and sustain property values."
But the district has argued that without the parcel tax, it would find itself with a more than $5 million budget deficit by 2020, if current spending and revenue patterns continue.
Contributing to the district's financial difficulties are continuing enrollment growth, state requirements that the district pay ever-escalating amounts into the state retirement system, and quirks in the allocation of local property tax revenues dating back to the passage of Proposition 13 in 1978 that give the district less in revenues per student than neighboring districts.
The Menlo Park district is "community-funded," receiving 62 percent of its revenue from local property taxes.
Other funding comes from parcel taxes (15 percent), foundation giving (8 percent), other local revenue (2 percent), the state and federal government (13 percent), and a state contribution to the teacher retirement fund (4 percent).
Unlike most other California districts, which receive state funding based on the number of students, very little of the Menlo Park district's funding increases with enrollment.
The amount of property tax revenue a school district receives per student depends on factors including the number of students, how much property tax revenue it was receiving prior to Proposition 13, the turnover in residential and commercial property, and the number of apartment buildings in the district.
Property tax revenue in the Menlo Park district is $2,500 less per student than in the neighboring Las Lomitas district, and $6,800 less per student than in the Woodside Elementary and Portola Valley districts.
While total property tax revenues have steadily increased in the district in recent years, spending has grown even faster, with the two main factors being enrollment growth, up 40 percent since 2005 to a total of 3,001 students today, and a dramatic increase in the district's required contributions to the state retirement system for teachers and other employees.
The district says if its personnel costs grow at projected rates, its contributions into the state pension system will increase from $2.25 million in the 2013-14 fiscal year to approximately $6 million by the 2020-21 fiscal year.
Required pension contributions by all California school districts will increase from 8.25 percent of teacher salaries in 2013-14 to 19.1 percent by 2020-21.
The increases were adopted in 2014 after years of underfunding left the retirement system verging on bankruptcy.
Contributions by the state, and by employees, are also increasing. Teacher contribution rates will rise to 10.25 percent of their salaries (up from 8 percent) over three years while the state's contributions will rise to 8.8 percent (up from 3 percent) over three years. (The state recently announced that the contributions by teachers hired after 2013 will go up an additional 1 percentage point over the next two years.)
Last February, when the Menlo Park district's governing board voted to put two parcel tax measures on the ballot, the board followed a formula that had worked well in past elections.
Since 1990 every measure the district had put on the ballot -- three bond measures and six parcel taxes -- had succeeded. All received more than 70 percent "yes" votes, and three had the approval of more than 80 percent of the voters.
In May 2016, the two parcel tax measures were on a special mail-in-only ballot. The taxes had no expiration date, and at their maximum could have increased property owners' total annual parcel taxes to $1,320 per parcel, plus increases in the Bay Area consumer price index.
Most of a fairly low-key campaign for the measures was aimed at parents in the school district. This time, however, there was organized opposition.
In May, both failed to gain the required two-thirds voter approval. One measure, which would have renewed an expiring parcel tax, received just over 60 percent approval, and the other, which would have tied the amount of the tax to increased enrollment, received 54 percent approval.
The school district made many changes after those measures failed.
The district's website, mpcsd.org, was expanded to include answers to questions from the public and an interactive budget tool. Presentations from meetings, along with transcripts of public comments about the district's budget deficit, are also on the site.
School board meetings, including 10 held between September and the December vote by the school board to put the current measure on the ballot, have been video-recorded and placed online. Most meetings were held in the Hillview Middle School Performing Arts Center.
Parcel tax and cuts
After the months of public outreach, the school board chose to resolve the projected deficit by combining a parcel tax with spending reductions. Since the board voted unanimously to put Measure X on the ballot, it has also met several times to discuss what cuts to make, both with and without the parcel tax's approval.
The March 7 election comes only a little more than a week before the district is required to give layoff notices to teachers who could possibly lose their jobs for the 2017-18 school year, so the district must have a plan in place in case the parcel tax fails.
While the school board will vote on the details at its Feb. 15 board meeting, Assistant Superintendent Erik Burmeister has said that as many as 30 positions may be cut if the parcel tax does not pass. While attrition from employees retiring or leaving could reduce the number of layoffs needed, the district probably would need to give out 30 layoff notices, but could later rescind some or all of them, Mr. Burmeister said.
The district plans to eliminate six to 10 positions even if the parcel tax measure passes. Again, Mr. Burmeister said, layoffs can probably be avoided due to attrition, but some temporary employees may not be rehired.
Spending reductions to be put into place even if the measure passes include $927,000 in spending that had been planned for the current 2016-17 fiscal year and $1.3 million in net reductions over the next two fiscal years.
Opponents to the earlier tax measures said they objected to the fact that the measures had no expiration date, and argued that the district really didn't need the money, and that it had not communicated well with the community, especially to those with no children in the school.
This time, however, the opposition has been mostly confined to comments on social media. The only ballot argument against the measure came from the Libertarian Party of San Mateo County and was signed by Jack Hickey of Emerald Hills and Harland Harrison of Belmont, both living well outside the district.
One of two new school board members elected in November, Caroline Lucas, had campaigned against the previous parcel tax measures, but she voted with her fellow board members to approve this measure.
One of the arguments made against the parcel tax is that its proceeds might be spent on raises for district teachers and not to preserve programs.
School board members argue that they would be willing to make other cuts (such as increasing class sizes, which ultimately eliminates teachers) to preserve competitive salaries for teachers.
"All the research tells us that the most important thing is the quality of the teacher in the classroom," school board member Terry Thygesen said at the board's Jan. 10 meeting.
In making its budget forecasts, the district assumed employees would receive annual raises approximately the same as the Bay Area consumer price index. The latest list of cuts that could be made if the tax fails includes foregoing raises in at least the first year.
The Ed-Data.org website of the California Department of Education shows that for the 2015-16 school year, the Menlo Park City School District had the third-highest average teacher salary ($101,064) of any district in the two-county (San Mateo and Santa Clara) area. For an elementary school district, it is the highest in the two counties.
Only the Los Gatos-Saratoga Joint Union High School District at $103,940 and the Palo Alto Unified School District at $101,408, had higher average salaries.
The Menlo Park City School District is No. 5 (in the two-county area) for the highest salary offered to a teacher, at $115,437. Higher maximum salaries are offered by the Hillsborough City Elementary ($127,039), the Los Gatos-Saratoga district ($126,625), the Palo Alto district ($122,046) and the Woodside Elementary School District ($120,659).