Local funding can come to the rescue of California schools

May 1, 2012

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(This commentary first appeared in TOP-Ed.)

California parents often imagine that their children attend a “local” school. They are mostly wrong. In a very real sense, California no longer has local schools – it has a system of state schools.

California voters know that their state school system is under grave financial stress, and that it is harming kids. According to a recent survey by the Public Policy Institute of California (PPIC), most Californians (90 percent) believe that “the state budget situation” is a problem for schools. Two-thirds of voters surveyed said that education quality is a big problem. More than 90 percent were concerned about laying off teachers. Nearly 90 percent were concerned about having fewer days of school instruction.

But here’s the thing: Most California voters don’t want to be taxed by Sacramento. Not even for the kids. Not even with these problems. In the PPIC survey, only 46 percent say they favor raising the state sales tax to support education. Only 40 percent favor raising state personal income taxes. These are dismal numbers. For heaven’s sake, just how bad does it need to get?

Attitudes are very different, however, if it is not Sacramento doing the taxing. Californians aren’t stingy or spiteful; they just want solutions they can believe in. The same annual survey has consistently shown that reliable majorities of voters across the state would be in favor of taxes in support of schools, so long as they are local taxes in support of local schools. This conclusion harmonizes with two other themes in the survey’s findings: Californians (82 percent) want school spending decisions to reside at the local level, and Californians have a higher opinion of their local leaders than they do of their state leaders.

California’s state leaders should take the hint.

There is widespread support for local taxation to benefit local schools with local control. Today, communities cannot exercise that political will, because Prop 13 set the passage threshold for local revenue measures at two-thirds, a threshold higher than a Senate filibuster. If Sacramento lowers the barriers, restoring to local communities the power to tax themselves in support of local schools, California’s local voters will happily take action.

Yes, but… what about equity?

The advantages of local taxation are obvious…  if you happen to live in a wealthy community. On the other hand, if you live in a community with a small tax base, local taxation is not obviously helpful. To be clear: Simply lowering the passage threshold for local taxes could recreate the kinds of structural funding inequities that led to the Serrano vs. Priest case.

Are there ways to unblock local taxation and also preserve equitable access to funding for all communities?

Yes. Here is one: Create a state-level obligation to equitably match qualifying local education taxes. The goal of this approach would be to ensure that every public school has equitable access to local funding, regardless of the tax base in the district it calls home.

Districts would be expected to win the support of their community in the form of local taxes. Districts with a low tax base per student would receive support from the state. Every dollar the community commits to education in the form of local taxes for public schools would be matched with money from the state fund. How much money from the state fund? It would depend on the community’s local funding capacity. Each district’s tax collections for education would be matched at a level sufficient to add up to at least the funding power per student of the average district in the state. Models drafted for the Education Excellence Committee in 2007 estimated that equalizing funding power might require a tenfold match in communities with a very low tax base per student. A district that enjoys a high tax base per student, by contrast, would not need or receive matching funds from the state.

Could it work? Here are some examples of the devilish details.

What form of local taxation ought to be permitted?

The Education Excellence Committee, citing the historical connection between property taxes and schools, suggested using a form of property surtax. The Think Long Committee suggested changing the mix to include taxes on services and other sources.

How should local tax measures for schools be authorized?

Some, citing Proposition 39 as a precedent, believe a local ballot measure would be appropriate or necessary. Others (myself included) believe that this responsibility should be returned to the jurisdiction of school boards.

Where would the money for a state matching fund come from?

It would be dealt from the top of the state general fund. That is, payment of matching fund obligations would become the state’s first order-of-payment responsibility after meeting its debt obligations.

Should there be a limit on the amount that a community would be permitted to raise through local taxes for its schools?

Yes. It is important to establish a limit in order to avoid unintentionally creating open-ended obligations for matching funds. Such a limit could usefully be expressed in terms that help build the public’s understanding of their investment in education. For example, the limit could be set to an amount equal to 10 percent of the community’s average weighted funding per student in the prior year. As confidence in the system develops, the limit could be adjusted.

If local funding for schools is eased, should state strings be attached?

Yes, with restraint. For example, the state could insist that local taxes for education be equitably used for the support of all public school students in a community on a weighted-pupil basis. Local funds also should not be allowed to become a football in the conflict over charter school funding. Transparency requirements would also make sense.

Could this actually be done? Is it politically feasible? What about Proposition 13?

No one knows, because it has not been tried or deeply examined. But look at the PPIC poll numbers above: Californians do not appear to want state solutions, but they agree about the problem and express confidence in local action and local leadership.

Why bring this up now? Shouldn’t we be focused on passing the revenue-related ballot measures that would support education?

Funding for education in California is pitifully out of whack with the rest of the nation. If California’s voters can muster statewide political will to equitably add school funding through Sacramento, let’s do it. But the survey doesn’t look good, does it? The next serious evaluation of education finance reform options should take a hard look at making local funding options a serious part of the solution.

Jeff Camp is the primary author of Ed100.org, a primer on education reform options in California. Since leaving a career at Microsoft to work for education change, Jeff has served on multiple education reform committees including the Governor’s Committee on Education Excellence. He chairs the Education Circle of Full Circle Fund, an engaged philanthropy organization cultivating the next generation of community leaders and driving lasting social change in the Bay Area and beyond. A visual summary of Ed100 can be found here.

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