How is it that, with the very best of intentions, we charge the poor so heavily for their own opportunities?
The opportunity? Our least advantaged local school district may get as much as $720 per student. The price? It has to give up its claim to its fastest growing source of stable, reliable funding — commercial property tax.
Last week The Almanac’s sister paper, the Palo Alto Weekly, kindly published my guest opinion on Proposition 15 in Santa Clara County. Proposition 15’s proponents had wowed the Board of Supervisors with the promise of $500 million for county and city services, and untold good for local schools. No one apparently realized that the proposition’s mechanics would transfer the majority of its school-allocated funding out of the county, from Gilroy to Palo Alto. Half a billion dollars would leave, less than $140 million would remain. Santa Clara County property tax would fund school districts in counties with lower costs of living and those that happen to have lower allocations to education.
Neighbors asked me, “Is it the same here in San Mateo County?” Yes. Proponents project $770 million of new commercial property tax revenue. That represents a 140% increase on top of this year’s estimated $550 million base. Half or more of the projected $770 million of additional revenue would leave our high-cost, high-allocation-to-education county and $270 million would remain for local governments.
Most local school districts — which only get $200 of “basic aid” from the state and whose property taxes parallel the high local cost of living — would get the same $100 per student as Palo Alto and Mountain View. That’s $1 million for Sequoia Union High School District and $500,000 shared between the elementary districts of Las Lomitas, Menlo Park City, Woodside and Portola Valley. Redwood City Elementary — a surprise entry into the ranks of the basic-aids last December on the back of strong commercial property tax growth — would get somewhat over $100. The state-funded Ravenswood school district would get $720.
As good as $720 sounds, that would be out of the $15,000 of new revenue per student collected there. Local areas with the highest percentage of disadvantaged students also have the heaviest concentration of commercial-industrial property. They are the major net contributors to the proposition’s new state education fund. Since Facebook’s arrival in 2011, commercial property value has driven double-digit increases in Ravenswood’s local property tax, growing it from $3 million in 2011 to $14 million this year.
The majority of Proposition 15’s new revenue — 75% — comes from changing all commercial property to a market-value based system. (Proponents’ research only shows 25% of the new revenue coming from reassessment of properties with base valuations before 1990 — closing the Proposition 13 ‘loophole.’) By changing the rules, roughly twice as much can be charged. According to the USC PERE model used by proponents, Facebook — having moved in less than 10 years ago and already the highest property tax payer in Ravenswood — would face dramatically increased taxes to keep up with the market values it is fueling itself.
Collecting more from Facebook might be more attractive if the money stayed local — and didn’t cannibalize future school property tax revenue from commercial appreciation and new construction.
But children in the Ravenswood district will only see $3 million more spent on their education — of the $82 million more expected from commercial properties in their district. They get 30% now — though, sadly, will only benefit once their local property tax exceeds the state’s funding formula. Sweeping all future appreciation and construction into the state fund ensures Ravenswood will never enjoy the stability of a basic-aid district and will never see funding proportionate to local costs.
In Menlo Park, it’s easy to see “closing the loophole” as reassessing the SRI campus and Stanford land along El Camino and Sand Hill Road. And to shrug. That shouldn’t have much immediate economic impact. And it would raise funding for the city, the local fire and harbor districts, and the county. SRI might even be turned into housing. Menlo Park City, Las Lomitas and our western neighbors would remain basic-aid districts, fed by expensive residential properties.
But if the proposition passes, pay attention instead to the schools in Ravenswood and Redwood City, Brisbane and South San Francisco. That’s where it will become clear whether the disadvantaged kids in our high-cost county are shouldering the invisible costs behind a statewide education fund.
Jennifer Bestor is a longtime Menlo Park resident who has served as the volunteer research director for Educate Our State, a grassroots, statewide, parent-led organization committed to a high-quality public education for all students (educateourstate.org/impact). She can be reached at jenniferbestor@yahoo.com.
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