A parcel tax cut that we can get behind | April 16, 2021 | Almanac | Almanac Online |

Almanac

Viewpoint - April 16, 2021

A parcel tax cut that we can get behind

Vote yes on Portola Valley School District's Measure S

by William R. Urban

The May 4 election offers the renewal of a lower parcel tax Measure S, to support Portola Valley School District's schools. A ballot measure last year to extend the now expiring $581 tax per parcel fell two percentage points short of the 66.67% approval to pass. Voters are accustomed to zombie ballot measures rejected in one election recycling unchanged to the next election. That's not happening here. The district engaged its citizens to find alternatives to the resulting loss of $1.24 million for direct teaching. This is not the first time the district has sought out advice from the wider community.

In May 2016, I criticized the district's administration of the parcel tax senior exemption in an opinion piece published in The Almanac. The district responded by making some changes, then invited me to join the Citizen's Parcel Tax Oversight Committee. The district worked collaboratively with the committee to introduce an enhanced expenditure testing template, allowing better verification of annual and multiyear parcel tax spending compliance. We also confirmed that the district actually reduced both the general fund nominal dollar and percentage of all spending in non-teaching categories between 2013 and 2018.

This fall, following the $581 parcel tax renewal's defeat, the district invited me and others to join a special advisory panel of individuals representing different constituent groups in the community to consult with the district on how to address the looming budget shortfall. Working with our advisory panel, the district reworked and cut its budget projections for the coming years, including canceling and deferring some hiring through teacher attrition, and eliminating two permanent positions. Additionally, I and others on our panel voiced strong recommendations that any new parcel tax measure must reflect a reduced dollar ask from the $581 expiring amount, to reflect both the economic realities and preferences implied in the voters' rejection of the March 2020 measure.

On these tax issues, the district's welcoming of feedback and sensitivity to community views over these last four years has been a model of what meaningful community engagement and responsiveness to voters should look like.

The new proposed, reduced tax of $471 per parcel is 18.9% lower than the expiring $581 tax that voters approved eight years ago. Additionally, the California Department of Finance reports that the CPI-U inflation index in the San Francisco metro area is up a cumulative 25.3% over these last eight fiscal years, so the proposed $471 tax is in fact 35.3% less in real inflation-adjusted dollars than the existing tax. Put another way, the expiring tax would have to reset to $728 this year to be equivalent to the 2013 tax. Also, the $471 is fixed for eight years, as the annual inflation adjustment is dropped from last year's failed measure.

Passing this $471 parcel tax helps protect the hard-won AA+ bond rating upgrade from Standard & Poor's that the district recently earned. The parcel tax, representing 8% of the district's total funding, was a critical part of the total fiscal responsibility story. Districts with diversified and reliable tax sources, and overall financial sustainability, are rewarded with higher ratings, translating into lower interest costs for taxpayers. Potentially millions of dollars in interest costs can be saved over the lifetime of bond measures supporting school facilities.

An annual $471 parcel tax is a warranted investment in our students and enhances their learning experience in a way even more vital now given the disruptive impacts of COVID-19, which imposed $950,000 of additional costs this last year. Not passing Measure S can only mean deep and immediate teaching cuts.

This significantly reworked and cost-reduced parcel tax deserves our yes vote.

William R. Urban, CFA, CFP, is a retired investment adviser, and resident and parent in Portola Valley for 30 years. He serves on the district's Citizens Parcel Tax Oversight Committee and served for 22 years on the Portola Valley Finance Committee. The Almanac is seeking arguments opposing Measure S. Send letters and op-ed submissions to [email protected]

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