News

Election: Schools seek second chance on parcel tax

Polls open March 7 for Menlo Park City School District measure

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.

Funding

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.

Pension costs

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.)

Failed measures

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.

Public outreach

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.

Opposition

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).

Comments

18 people like this
Posted by The Onion
a resident of Atherton: Lindenwood
on Feb 7, 2017 at 3:39 pm

4 short months ago, the Menlo Park school district, crying in its beer, over all the budget deficits it was facing, decided to . . . give everyone, staff and teachers, everyone, a raise.

I have a suggestion. Let's give everyone in the school district a nice salary raise, while we sit and try to figure out how to balance the budget. YOU CAN NOT BE SERIOUS! If you want to be serious, stop acting like clowns. Every day the school district news literally reads like headlines from the Onion. I understand that sometimes life imitates art, but the Onion? Really, School Board, please do better. Don't give everyone in the district a raise and then cry Po Boy. Face palm.

Now 9 months after being overwhelmingly rejected, they are at it again requesting that we all forget about the PAY RAISE in the face of BUDGET DEFICITS, and assuring us that if we only pass this NEW Parcel tax, they absolutely promise it will go to classes and the students, NOT the teachers and staff. YEAH RIGHT! They are also sneaking it in again in an off cycle election. Hey, why wasn't it on the ballot this November? Could it be that it would have been overwhelmingly rejected again?

Please do not fall for any of this nonsense from the morally bankrupt school distict. The citizens of the district told you to live within your means. To stop lining your retirement and pension funds, to stop giving yourselves pay raises and to start chopping staff positions and advocating for a platinum school program when the gold standard is more than adequate.

Send the message next month. Send these guys packing. Don't worry. They will be back next year, with another plea for "mo money". Its what they do.

NO MORE MONEY. LIVE WITHIN YOUR MEANS. Geeze.


22 people like this
Posted by Karen Dearing
a resident of Menlo Park: Central Menlo Park
on Feb 7, 2017 at 3:59 pm

Karen Dearing is a registered user.

Ah The Onion. Always a good laugh!

Thank you, Barbara, for your continued excellent coverage of our district. For those of you seeking to learn more about why Measure X is on the ballot and the funds are needed, I encourage you to check out the school district's FAQs about the situation.... Web Link

Our district is thriving but growing, and the current flow of funds are not enough to keep up. See the "Crunching the Numbers" Guest Opinion from a few weeks back if you want to understand more about why.... Web Link

I get it! We all instinctively react to "taxes" in a negative way. But this situation is real, and as Assistant Superintendent Erik Burmeister has said, without Measure X, “our district would have to make such deep cuts that it would become unrecognizable."

Measure X is a win for our children, our schools, and our entire community, and all for the bargain cost of about 50 cents/day above what property owners (yes, I am one) currently pay. YES ON X!


2 people like this
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 7, 2017 at 4:47 pm

Jack Hickey is a registered user.

And, if you vote NO and Measure X fails, that's a DOLLAR a day in your pocket.

Still, you'll have 2 DOLLARS coming out of your other pocket for MPCSD.


11 people like this
Posted by Jarrod
a resident of another community
on Feb 7, 2017 at 5:26 pm

"4 short months ago, the Menlo Park school district, crying in its beer, over all the budget deficits it was facing, decided to . . . give everyone, staff and teachers, everyone, a raise."

Yes, and that was a proactive raise for the previous school year, which the district has done for the last several years. Both unions agreed to stop this practice moving forward, and in in order to achieve this they agreed to a 0% raise for the current school year.


26 people like this
Posted by Child-free in Menlo Park
a resident of Menlo Park: Menlo Oaks
on Feb 7, 2017 at 7:33 pm

There will always be anti-tax, anti-public school activists in the world (and a few that are quite active on this forum). I want accountability and transparency but I also believe in the importance of public schools. I'm satisfied and happy to vote for the parcel tax this time around.
Thanks Almanac for your thorough coverage of this issue.


18 people like this
Posted by Ron Shepherd
a resident of Menlo Park: Central Menlo Park
on Feb 8, 2017 at 12:48 pm

The larger issue behind all of these tax increases, bond issues,etc. is the continuation of funding a governmental employee pension system that is financially not sustainable. Let's get to the heart of the problem, fix the pension. Most elected officials will not take on this cancer for fear of losing the labor vote. Get some courage and fix the real issue!


10 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Feb 8, 2017 at 1:50 pm

Peter Carpenter is a registered user.

The good news is that (I think) the parcel tax will pass.

The bad news is:
1 - much of the proceeds will be spent on salary and benefit increases
2 - programs will still be cut
3 - nothing will be done to reduce the district's existing pension liabilities


12 people like this
Posted by Karen Dearing
a resident of Menlo Park: Central Menlo Park
on Feb 8, 2017 at 1:53 pm

Karen Dearing is a registered user.

Ron, I couldn't agree with you more! Measure X is critical to our community precisely because of the broken system. Let's not let the reality of the broken pension system and a need to fix it lead to a decision to let our children, schools, and community suffer in the mean time. YES ON X!


12 people like this
Posted by MPCSD Community Member
a resident of Menlo Park: other
on Feb 8, 2017 at 1:59 pm

Continued support of our local schools is important to our community. I'm voting YES on Measure X.

Here's a link to FAQs on allocation: Web Link


6 people like this
Posted by Plubius
a resident of Menlo Park: Central Menlo Park
on Feb 9, 2017 at 11:17 am

I agree with Peter. This measure will and SHOULD pass. This measure buys the district some breathing room verse the severe cuts that would be required. HOWEVER..., the district needs to grapple with a out of control pension system that will put tremendous pressure not only on MPCSD but all CA schools. Nice article in today's (2/9) Daily Post by Emily Mibach highlighting how the pension burden is going to surpass the $2.8m/yr measure X revenue in three years.

I understand that individual districts do not have direct control over the state pension system (so PLEASE no comments back to that point) but with enough public outcry, the legislators will eventually listen to voters over the unions.



Like this comment
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 9, 2017 at 12:05 pm

Jack Hickey is a registered user.

The Board's of Directors of California's School Districts can and should petition the legislature to pursue across-the-board reduction in benefits to the extent necessary to eliminate the unfunded liability. Those with pension plans in the private sector saw their retirement benefits drastically reduced by the 2008 financial meltdown. Public employees must accept their fair share. Defined benefit plans should be replaced by 401k type plans.

Question: Why should a district which took on $114,100,000 in construction bond debt, and turned it into the current $131,000,000 debt, be rewarded by an increase in parcel taxes to $1,078 per year?

"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."

Vote NO on Measure X, and let the parcel taxes drop to $675 per year.


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