The rout of Los Angeles Unified’s parcel tax last week will reverberate beyond L.A. to other school districts that had hoped a victory in Los Angeles might signal that their voters, too, would consider higher school taxes.
Think again, said Mark Baldassare, president and CEO of the Public Policy Institute of California, which regularly polls Californians on issues. The results in Los Angeles send a message that school districts “will have to lower expectations about whether the public connects the dots between wanting more money for schools and the willingness to raise their own taxes.”
The state’s business community, on the other hand, will be buoyed that a parcel tax that would have charged buildings by the square foot went down. It was designed to hit large commercial and business properties the hardest.
Now, the business community is heading into a mammoth fight over a November 2020 statewide ballot initiative to amend Proposition 13, the 1978 constitutional amendment limiting property tax increases. It’s called a “split roll” initiative because it wouldn’t affect residential property owners but would significantly raise taxes for business and commercial properties. Some of the Los Angeles social justice and community organizations that canvassed for Measure EE, including InnerCity Struggle and the Community Coalition, were instrumental in putting the split roll on the ballot.
Think of Measure EE as the first round in the bigger fight, and the business community won, said Dan Schnur, a longtime political observer and adjunct faculty member of the USC Annenberg School.
In a small turnout, Los Angeles Unified voters rejected a parcel tax that would have raised $500 million per year. Parcel taxes require the approval of two-thirds of voters. With 46 percent voting yes, Measure EE failed to win a majority.
The Los Angeles Unified Board of Education voted in March to put the parcel tax on the June ballot, leaving little time to organize. The board could have waited until the March 2020 Democratic presidential primary, assuring a big turnout in a Democratic city, or until the November 2020 general election. But they pressed ahead for a special June election, in the after-glow of a six-day strike by district teachers that had brought parents to picket lines and elicited what appeared to be widespread public sympathy. If the initiative had passed, it would have given the district an extra year of revenue to pay for higher salaries and smaller class sizes, promises spelled out in the 3-year teacher contract signed in January.
In a poll commissioned by the district soon after the strike, 74 percent said they’d back a parcel tax to help fund schools. That figure dropped to 69 percent, with 4 percent undecided, after presented likely arguments by opponents.
The board and L.A. Unified Superintendent Austin Beutner appeared to have backers working in sync. The district’s unions, United Teachers Los Angeles and Local 99 of the Service Employees International Union, campaigned hard for Measure EE, as did community groups and Mayor Eric Garcetti. With big donors like philanthropist Eli Broad and L.A. Clippers owner Steve Ballmer chipping in, the Yes on Measure EE raised at least $8 million — four times the amount raised by opponents. The L.A. Area Chamber of Commerce and the Valley Industry & Commerce Association had vowed to raise $4 million to defeat the measure, but, together with money from the anti-tax Howard Jarvis Association, raised half that.
Only about 15 percent of the district’s 2.5 million voters voted on what, for most of them, was the only item on the ballot.
Edgar Zazueta, senior director of Policy and Governmental Relations for the Association of California School Administrators, said given the turnout and the defeat of Measure EE he “questions that there is a bounce on the heels of a strike.”
In today’s news cycle, people quickly move on to other things, and it’s difficult to sustain energy weeks later, Zazueta said. The lesson for the education community would appear to be “not to rely on labor discord to build a campaign” for more money, he said.
At a post-election joint press conference, United Teachers Los Angeles President Alex Caputo-Pearl and L.A. Unified board members praised the work of a broad coalition of community groups, labor unions and elected officials who elevated the issue of underfunded schools. Caputo-Pearl called the defeat “the beginning of the fight for funding sparked by our strike.” In an interview, board President Mónica Garcia said the board has not ruled out returning next year with another vote on a parcel tax, even as it looks to Gov. Gavin Newsom and the Legislature to increase overall funding for schools.
Zazueta and Baldassare agree the focus should shift to Sacramento and statewide efforts requiring only a majority vote. Measure EE’s defeat affirmed how hard it is to pass a parcel tax — and virtually impossible if there is well-organized opposition, they said.
One proposed constitutional amendment before the Legislature, requiring statewide ratification by voters, would at least make it easier to pass a parcel tax. Senate Constitutional Amendment 5 calls for lowering the threshold from two-thirds to 55 percent — the same percentage needed to pass a local school construction bond. The California Local Government Finance Almanac analyzed school parcel taxes on the ballot since 2002 and found that 91 percent would have passed with the lower threshold, compared with 62 percent that actually passed.
For now the proposed constitutional amendment has stalled in the Senate, although the author, Sen. Jerry Hill, D-San Mateo, can revive it next year.
Focus shifts to the split roll
Most school parcel taxes impose a flat amount per property, a regressive form of taxation that doesn’t consider the value of the property; a 1,000-square-foot bungalow and a 25-story office building pay the same. Measure EE would have imposed a tax of 16 cents per square foot, meaning commercial real estate and businesses with larger buildings would pay more. Business groups took offense — not just because of the cost but how Beutner and the board treated them, they said.
“We said we want to be part of a solution for a plan to make schools better,” said Stuart Waldman, president of the Valley Industry and Commerce Association, based in the San Fernando Valley. But Beutner and the board didn’t compromise, perhaps by capping what a property owner would pay and restricting what the money would be used for, along with guarantees it would be used effectively, he said.
Rhetoric on both sides became heated. UTLA and community groups condemned businesses and their CEOs for dodging their fair share of taxes, dooming poor kids to crowded classes and underfunded, understaffed schools. In ballot arguments and TV ads, the business coalition dismissed the parcel tax as a bailout of an inefficiently and ineptly run district.
What caught the attention of Rob Lapsley, president of the California Business Roundtable in Sacramento, was the argument by Measure EE supporters that the parcel tax was the first of a two-pronged strategy, with the second being the split-roll initiative. Schools and Community First, the formal name for the split-roll initiative, could bring in $11 billion annually, with $4.5 billion dedicated to schools and community colleges. By requiring business properties to be reassessed regularly, not just when they are sold, properties’ taxable value would increase, generating more revenue.
The Business Roundtable, which has vowed to lead an $80 million effort to kill the split-roll initiative, had not gotten involved in a school parcel tax before, Lapsley said. Its $355,000 donation, the largest contribution to the No on EE campaign, turned the measure into an early skirmish on split roll — and signaled that there is more money coming. “We will not be outspent,” Lapsley said. “We will not; it’s too important to the California economy.”
In the aftermath of Measure EE, the coalition that could potentially support a future L.A. Unified parcel tax appears strong, but relations with the Los Angeles Area Chamber of Commerce, a prominent partner in district innovation and youth workforce initiatives, have soured. Citing the chamber’s anti-Measure EE efforts, Caputo-Pearl, Garcia, Garcetti and Beutner notified the chamber they were dissolving the joint LA Compact, a decade-old collaboration among two dozen organizations and institutions, including the chamber of commerce, to better prepare students for success in college and pathways to careers.
Meanwhile, at a meeting last weekend, L.A. community groups recommitted to working to support the split-roll initiative and called the organizing for Measure EE “good practice” for the campaign ahead. Unlike the parcel tax, a simple majority of statewide voters will be needed to pass the split-roll initiative.
Hector Sanchez, who directs engagement work for the Community Coalition, told EdSource the fight for full education funding isn’t over. The issue, he said, is “how much corporations are willing to fund measures to assure the success of the community” instead of putting “profits over people.” If the message is clear, “we have faith voters will come out,” he said.
To get more reports like this one, click here to sign up for EdSource’s no-cost daily email on latest developments in education.
We welcome your comments. All comments are moderated for civility, relevance and other considerations. Click here for EdSource's Comments Policy.
Jim 4 years ago4 years ago
Breakfast in the classroom (BIC) is hated by teachers and most parents as there is no way to opt-out. The only reason for it’s existance to to provide jobs to SEIU and revenue to vendors. As long at BIC exists I know that LAUSD is not serious about money.
Lester 4 years ago4 years ago
The other option is to reform LAUSD. I am sure they would fight that tooth and nail!
Pink Submarine 4 years ago4 years ago
I support the teachers and of course I support the kids getting a better education, but I see no intention by LAUSD or UTLA of being accountable for their spending. There are so many administration positions that are not only unnecessary, but actually standing in the way of efficiency and a good education for our kids. I don't trust the LAUSD administration, and I have my doubts about UTLA's intentions to hold LAUSD accountable. Until … Read More
I support the teachers and of course I support the kids getting a better education, but I see no intention by LAUSD or UTLA of being accountable for their spending. There are so many administration positions that are not only unnecessary, but actually standing in the way of efficiency and a good education for our kids. I don’t trust the LAUSD administration, and I have my doubts about UTLA’s intentions to hold LAUSD accountable. Until they prove that they can be responsible and actually get the money to the kids and the real teachers, I’m not giving them any more money.
Paul Muench 4 years ago4 years ago
Have you considered that low funding can lead to low accountability? Maybe the public would get a lot more interested in outcomes if they felt they paid top dollar for them.
Todd Maddison 4 years ago4 years ago
Perhaps the People can see that LA Unified - like most K-12 districts across California - are not being exceptionally good stewards of their money and are reluctant to give them more, even if they can "tax someone else" to do it? Since Prop 30 was passed in 2012, per ADA spending in CA has risen tremendously - about 40%, at a rate of about 6%/year. That's three times faster than inflation. And what are we … Read More
Perhaps the People can see that LA Unified – like most K-12 districts across California – are not being exceptionally good stewards of their money and are reluctant to give them more, even if they can “tax someone else” to do it?
Since Prop 30 was passed in 2012, per ADA spending in CA has risen tremendously – about 40%, at a rate of about 6%/year. That’s three times faster than inflation.
And what are we getting? Very little improvement in any measure of academic performance.
We are, however, getting raises in pay in the education sector that are in themselves 2 to 3 times the rate of increase that the average public is getting.
And we are also getting increases in pension costs that are staggering – between the district and state the current “employer contribution” for this is over 26% per year – compared to the average private industry contribution of 6.2% for Social Security plus a 3% 401K match (for a bit less than 10%).
Again, as with raises, we see people in education giving themselves benefits that cost easily 2 to 3 times as much as private employees get.
And the average teacher pay in California? Now exceeding $80K/year, according to the State CDE’s “J90” reporting. Teaching may not be a path to wealth, but it certainly does not require eating dog food or taking the bus to work…
Maybe the answer here is the obvious one: People didn’t vote against the parcel tax because they’re somehow selfish or don’t value education, they voted against it because they can see that the dollars they volunteered to give to education in the past are being spent in selfish and ineffective ways by the education industry – and therefore aren’t willing to do it again.
I would suggest the education industry figure out how to stop using the money we give it to simply increase its own pay and benefits and use it to improve student performance, then come back and ask for more.
My mom always used to say “first you prove you can do the job, then you ask for the raise,” not the other way around. You never get anywhere asking for a raise and telling the boss if he gives yo more money then you’ll become a better worker…
Worked pretty well for me in my career, perhaps the education business might learn a bit from her as well?
tom 4 years ago4 years ago
Well stated Todd and I agree that you described the major problem. It's not the lousy, overpaid administrators that consume most of the money, though I agree some are overpaid. The politicians and unions promised teachers nice pensions and inflated the estimated annual rate of return which in turn keeps employee payroll contributions lower. Now we have districts having to try and shore up the pensions (and health care in some cases) … Read More
Well stated Todd and I agree that you described the major problem. It’s not the lousy, overpaid administrators that consume most of the money, though I agree some are overpaid. The politicians and unions promised teachers nice pensions and inflated the estimated annual rate of return which in turn keeps employee payroll contributions lower. Now we have districts having to try and shore up the pensions (and health care in some cases) by contributing a whopping 18% of salaries. No private company is that generous because that kind of outflow is not sustainable! Why does our government think they are so different?
This rejection of more taxes to support such a broken government-run system is a welcome sign that perhaps the workers and taxpayers have had enough and traditional public schools have to find a different way. As it is LAUSD academic performance is dismal – roughly 70% of the kids are failing ELA and math. No wonder parents are turning to charters.
And another thing that is rarely brought up – John – is how much cheaper charter schools are to run – at least 30% less expensive. Why? Because the financial burden of the unionized teacher benefits is removed. There are still benefits to teachers but not inflated ones. What a bonanza it is for a principal to have 30% more money that can truly go to smaller class sizes, more technology, better security. Meanwhile, the California Legislature moving to make it more difficult for charters. It’s rather obvious that the unions don’t like the competition and care more about the adults than they do about the kids. What other conclusion can be reached?
John Fensterwald 4 years ago4 years ago
Tom, I see my name suddenly appear, so I guess that's addressed to me. In fact, most charter schools have joined CalSTRS, and so pay the same proportion to pensions as traditional districts. I wish I had the precise percentage but don't. Seeing the escalating costs, many new charter schools aren't signing up for CalSTRS. s. You didn't mention health care benefits. Teachers unions in a few districts, like LA and Oakland Unified, have negotiated … Read More
Tom, I see my name suddenly appear, so I guess that’s addressed to me. In fact, most charter schools have joined CalSTRS, and so pay the same proportion to pensions as traditional districts. I wish I had the precise percentage but don’t. Seeing the escalating costs, many new charter schools aren’t signing up for CalSTRS. s.
You didn’t mention health care benefits. Teachers unions in a few districts, like LA and Oakland Unified, have negotiated for full health coverage with no or minimum deductibles, but some districts barely contribute to healthcare — a reason the teachers in New Haven Unified went out on strike.
tom 4 years ago4 years ago
Yes John, was referring to you since your group decides what to write about. According to the Sacto Bee on 2/9/2018, and quoting CalSTRS data, new charter school enrollment into CalSTRS dropped to 80% in 2014 then to 67% in 2015. CalSTRS thought charters were seeking alternative retirement plans because of climbing employer contribution rates, which have been rising annually as we know. Charters do have such choices, and if traditional public … Read More
Yes John, was referring to you since your group decides what to write about. According to the Sacto Bee on 2/9/2018, and quoting CalSTRS data, new charter school enrollment into CalSTRS dropped to 80% in 2014 then to 67% in 2015. CalSTRS thought charters were seeking alternative retirement plans because of climbing employer contribution rates, which have been rising annually as we know. Charters do have such choices, and if traditional public schools (TPS) could do the same, they would also benefit and be able to spend the savings on smaller class sizes, technology, and extra instruction for the kids that need it. Instead, we witness unions and politicians continue trying to raise taxes as well as inhibit school choice in support the same TPS structure instead of trying to fix it. Based on the rejection of the LAUSD parcel tax, these groups are seeing the public unwilling to keep on this path. The piggy bank is empty, let’s advocate for change.
As far as health care costs, it’s nice to offer it to employees when you have the money to do so, but can LAUSD and Oakland Unified now afford it? Sure doesn’t look that way John.
Some Districts have lifetime healthcare for teachers as well, but can they keep doing that as well? Why don’t their retired teachers enter Medicare like everyone else when they reach 65? Instead money is taken from youngest among us, and they can’t even vote. It’s just not right and things need to change. I hope you write about these things some day John.
John Fensterwald 4 years ago4 years ago
Good questions, good topics to write about, Tom.
This is a good opportunity to plug our (excellent, in my opinion) 5-minute video explainer on the pension dilemma. It’s not as if we haven’t written about the issue.
Sonja Luchini 4 years ago4 years ago
Beutner was suddenly concerned enough to "get behind" funding for LAUSD when his backers do all in their power to undermine public schools for charters? The measure was rushed and handled poorly, but maybe this failure was the corporate reformer agenda all along: to instill such lack of trust (remember iPads and MISIS under Deasy?) that they'll be able to let the district decline and blame the voters instead of the years of … Read More
Beutner was suddenly concerned enough to “get behind” funding for LAUSD when his backers do all in their power to undermine public schools for charters? The measure was rushed and handled poorly, but maybe this failure was the corporate reformer agenda all along: to instill such lack of trust (remember iPads and MISIS under Deasy?) that they’ll be able to let the district decline and blame the voters instead of the years of Deasy, Cortines, Garcia and all other corporate reformers involved with LAUSD who’ve purposefully put profits and their personal agendas over our children’s needs.
Jerry Hill 4 years ago4 years ago
This is a great analysis of the issue and the challenge we’re facing trying to lower the threshold to pass a parcel tax in California. Constitutional amendments are not subject to the legislative calendar so I can bring the measure up anytime between now and the end of session next year.
Craig Mordoh 4 years ago4 years ago
What is “full education funding?”
el 4 years ago4 years ago
Trying to pass a parcel tax when it's the only thing on the ballot in an obscure June 2019 election in a large, impersonal district like LAUSD seems like poor strategy. It's a time when the people who are most likely to benefit from additional school funding are least likely to even know there's an election let alone find time to get to the polls. It's easy to say in hindsight that they would have … Read More
Trying to pass a parcel tax when it’s the only thing on the ballot in an obscure June 2019 election in a large, impersonal district like LAUSD seems like poor strategy. It’s a time when the people who are most likely to benefit from additional school funding are least likely to even know there’s an election let alone find time to get to the polls. It’s easy to say in hindsight that they would have benefitted from the publicity and organizing and GOTV that will be present during the 2020 primary and general elections, so I’ll say it. I don’t think it should be taken as an accurate read of the mood of the population as a whole.
That said, fundamentally the state is not funding us at the level schools need to meet their basic responsibilities, and an LAUSD parcel tax wouldn’t change that for the other districts in the state. Even holding everything else constant, the enormous ballooning costs of CalPERS, CalSTRS, health insurance, and the minimum wage increases are completely out of the control of districts and completely unfunded by the state legislature. The total impact on this section of the budget is in the 20% range per year. The state believes our costs only go up by around 3%. Schools are patching this together by spending down the last of their reserves but that shell game is going to end in another year or two. What is the legislature going to do?
Paul Muench 4 years ago4 years ago
Wealthy people are spending record amounts on education. That is a good thing to remember.
C.F. 4 years ago4 years ago
Wealthy people are spending record amounts of money on Teslas, yachts, and everything else. Am I supposed to put myself into the poorhouse with property taxes just so that the administration at LAUSD can waste money like the wealthy?