Opinion > Commentary

Local-state funding should sync like a tandem bike


picture of Jeff Camp

Jeff Camp

In 2013, most California education-watchers expect two policy debates about school finance. Two is not enough; there will need to be three.

Weighted student funding
The first debate will probably be about how to inject a level of principle into the capricious way that state funds are apportioned to school districts. The arcane term in this debate is “weighted student funding,” which proposes to allocate dollars to districts on the basis of the needs of the students in attendance rather than on the basis of program allocations and decades-old political determinations. This worthy idea is nothing new; it was a centerpiece of the 2008 recommendations of the Education Excellence Committee. But it is politically challenging, particularly while effective resources per student in this state remain substantially below national norms. Any change of this kind will create winners and losers. Californians are not known for Vulcan dispassion.

Easier parcel taxes
The second debate will probably be about whether to allow local school districts an easier way to raise local parcel taxes in support of local schools, or perhaps in support of local students. (The difference may seem subtle, but it means everything if your kids attend a charter school or if you want to enable partnerships that extend beyond traditional schools.) Prop. 13 closed the door on local use of property taxes based on assessed property value, but it left the door cracked open for other approaches. With a two-thirds vote, districts can levy local parcel taxes, which are based on the existence of a parcel rather than on its value. (A late-2012 court ruling in Borikas v. Alameda Unified School District limits districts’ flexibility in creating parcel taxes.) Some of California’s wealthiest communities have been able to sustain strong participation in local public schools through successful local parcel tax campaigns that enable them to offer school programs capable of competing with private schools.

A lower passage threshold for parcel taxes would significantly expand the number of districts able to muster the political support to pass them. Sacramento rumblings suggest that the debate will focus on whether to drop the passage threshold to 55%, mirroring the facilities bond threshold set by Prop. 39.

The combination of these two concepts (weighted student funding and a lower parcel tax passage threshold) is politically appealing. Districts like Los Angeles have been “winners” at lobbying for state-funded programs under the status quo, and might resist a weighted formula alone. But a lower pass rate for parcel taxes as part of the deal could change everything. It would neatly deflect the opposition of higher-wealth districts by giving them a way to solve their own funding problems locally. It would give districts in middle-wealth districts a new shot at meeting their funding needs if they can build trust with their local communities. Nonprofit community organizations would have a new reason to fund community discussions. District leaders and union leaders would have a powerful new reason to work through their differences.

This kind of high-engagement local dialogue has been substantially absent from California education for 30 years. Earnest, detailed local conversations about local innovation powered by local funding commitments could create new conditions for innovation in California education.

But there’s a problem. On its own, this plan stinks.

A lower passage threshold for local parcel taxes doesn’t help if your local taxpayers have no wealth to tax. This is a fatal flaw in the proposal to simply lower the parcel tax passage threshold to 55 percent. If the plan does not address the needs of students in poor communities, it’s not equitable policy. Sooner or later, courts would throw it out.

Tandem_Bike

The tandem bicycle: a metaphor for the future of education funding in California.

The tandem bicycle
Which brings us to the third option: a system that matches local funding with state funding.

Here’s how it could work. The passage threshold for local taxation in support of schools would be lowered to 55%, matching the level set under Prop. 39 for school facilities bonds. In communities with a strong tax base per student in residence, that would be the end of it – the money raised locally would stay local, period. In districts with a weaker tax base per student, however, the state would have an obligation to match the local taxes raised. The point of this match would be to equalize local funding power, enabling all communities to take an active role in the support of their schools.

Examples can help clarify the concept. The tax base per student in Fresno is much smaller than that in San Francisco. San Francisco enjoys a powerful local tax base, with high local wealth and relatively few students per taxpayer. Under the tandem bicycle plan, San Francisco would gain the capacity to pass local tax measures in support of education at a lower threshold, but it would receive no matching funds. Fresno, by contrast, has a relatively small tax base per student. Therefore, it would receive significant state matching funds. The point is to ensure that local funding capacity everywhere ends up equivalent to at least the state median. In the metaphor of the tandem bike, the local community would steer, and the state would help pedal.

Some people will hate this idea, of course. Show me a policy involving money, and I’ll show you a policy that someone thinks comes straight from the pit of hell. But most people trust their local representatives and leaders more than they trust policymakers in distant Sacramento. And people are certainly more comfortable with paying taxes if they know the taxes will benefit their own community.

Some will object, rightly, that parcel taxes are a clumsy vehicle. Wouldn’t it be better, and more just, to base property taxes on property value rather than on property parcels? Sure – blame the voters of 1978 for foreclosing on that option. Perhaps a bold legislative leader, thinking through the 55 percent parcel tax idea, will choose to test the voltage level of the third rail, instead.

I’m often asked where the money to meet the state’s “tandem bike” matching fund obligations would come from. Here’s one possibility: Matching obligations would simply come off the top of the state’s general fund, as a payment commitment on par with bond debt. Then education funds would be allocated to students and their schools and districts according to a weighted student formula. The 2008 report of the Education Excellence Committee includes an analysis of how a variable matching fund would work. Additional discussion can be found here.

There are many advantages to re-engaging communities in the critical task of funding local education. But local funding power varies greatly. State and local funding will work best in tandem.

•••

Jeff Camp is the primary author of Ed100.org, a primer on education reform options in California. He co-chairs the Education Circle of Full Circle Fund, an organization that coordinates small teams of volunteers working in support of great nonprofit organizations that need a little help to get to the next level, whatever that may be. A visual summary of Ed100 can be found at http://bit.ly/edprezi .

Filed under: Commentary, Local Control Funding Formula, School Finance

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10 Responses to “Local-state funding should sync like a tandem bike”

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  1. Steve Rees on December 26, 2012 at 1:11 pm12/26/2012 1:11 pm

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    Bravo! I salute your new idea, and one that offers a new metaphor for thinking about state and local politics.

    If it means anything to be a citizen of the state of California, there ought to be little local difference in the quality of the school a kid walks into. By “quality,” I do mean the quality of leadership, staff, curriculum and the building itself.

    For those who are still enthralled with purely local control, I’d like to introduce them to Arkansas ex-governor, Orville Faubus. (For those too young to remember his defiance of Pres. Eisenhower’s deseg order, refer to: http://en.wikipedia.org/wiki/Orval_Faubus). The Little Rock integration struggle is described here: http://en.wikipedia.org/wiki/Little_Rock_Crisis

    And why is Hawaii, the only state that is an island, running schools within one statewide district? California runs its nearly one thousand districts as if they were islands.

  2. Jeff Camp on December 22, 2012 at 2:42 pm12/22/2012 2:42 pm

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    Thanks for the many comments. Louis, an important element of this proposal is to separate the local match commitment from dependency on a specific new revenue source. The match dollars would come out first, similar to bond payments.

  3. Louis Freedberg on December 22, 2012 at 11:07 am12/22/2012 11:07 am

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    Jeff’s proposal is an excellent one. The obvious challenge is where would the money come from. It would also be helpful to run some numbers — how many districts are likely to approve parcel taxes with a lower 55 percent threshold, and what kinds of formulas might be used to figure out the matching fund equation, , and the costs under various formulas.

  4. Arun on December 21, 2012 at 11:20 am12/21/2012 11:20 am

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    Jeff is hitting on a major equity issue typically ignored by the “local control is the answer to everything” crowd. Poor communities have lower tax bases and the taxes have a more significant impact on incomes. It will be either up to the state or the courts to offset the inequities.

  5. el on December 21, 2012 at 8:24 am12/21/2012 8:24 am

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    Parcel taxes work very differently in urban/suburban areas versus rural areas. Large rural landowners may have one parcel or dozens for grazing … they’re not necessarily uniform in size. In a low population rural district, it may not be possible to raise a useful sum that way.

    A per dwelling tax, if that is possible, might be more doable in those areas, though it would leave commercial landowners out. Of course, parcel taxes are very favorable to commercial landowners as well.

    Nevertheless, there will be many districts where a parcel tax is not going to be feasible at all.

  6. Eric Premack on December 20, 2012 at 2:27 pm12/20/2012 2:27 pm

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    John’s historical note is interesting and on-point, but its also worth noting that AB 65 never really took effect b/c Prop 13 passed just prior to AB 65’s effective date–and largely decimated it.

  7. john mockler on December 20, 2012 at 8:59 am12/20/2012 8:59 am

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    Not only proposed but passed in 1977 and signed into law (AB 65 Greene) by then Governor Jerry Brown

  8. Merrill Vargo on December 20, 2012 at 8:36 am12/20/2012 8:36 am

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    I agree with Dave, that the issue here is how we can restore local ownership of — and, as a result, trust in — their schools. Without that, we’ll never be able to create the school system that this state needs and that our kids deserve. So I appreciate Jeff’s effort to get this solution, which as he says has been proposed before, back on the table. As he notes, people will respond with the common wisdom which is that politics rules out any solution that entails winners and losers. But wait a minute! We’ve just gone through years of losers and anyone who thinks that districts lost equally hasn’t been paying attention….. And to anyone who is poised to say that “that’s too complicated, no one will ever understand it,” all I can say is have you tried to explain the current system to anyone lately? So, ride on Jeff!

  9. David Patterson on December 20, 2012 at 7:22 am12/20/2012 7:22 am

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    This is a thoughtful article. George Santayana is quoted as saying “Those who don’t learn from history are doomed to repeat it.” This current discussion brings to mind the Serrano vs. Priest rulings in the 1970s, which declared unconstitutional the local financing of public education based on equal protection provisions in the California constitution.

    The reality of equalization of education funding at the state level means equalizing down. My experience in California and other states have me convince that removing a local community’s financial connections to their local schools is a major factor in the decline of support for California schools, taking us from the best academically in the nation in the 1960s to being near the bottom today. I strongly believe we must restore our communities fiscal and policy ownership of their schools. I also see the growth of charter schools as another reflection of parents and teachers deep interest in improving education and escaping the crippling limitations of the existing top-down bureaucratic system. Any solutions need to address both these issues.

    The huge disparities in property tax wealth are as big an issue today as they were in the 1970s. I hope Jeff Camp’s article will trigger a more thoughtful discussion about empowering local communities to improve both support for and choices in public education.

  10. Lenny Mendonca on December 20, 2012 at 7:16 am12/20/2012 7:16 am

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    2013 should be a good year to have a real discussion about reforming CA’s broken education funding approach. This is a great start to that debate so we don’t miss the window and do it right

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