[guest post by JVW]
UPDATE: The district is going with the $0.16 per square-foot option and plans to have it on the June 4 ballot. It will require a two-thirds majority vote to pass. I think going with the progressive tax is a bad idea: my gut instinct tells me that the people with the biggest lots who would receive the largest tax bills are likely those who do not have students in the LAUSD system. That family with the 8,500 square-foot lot who generally votes Democrat because they love the environment might have been willing to cough up an extra $537 each year to help the schools, but may balk at a $1,360 increase. Good luck on convincing them the money will be used wisely.
Though I don’t believe we discussed it on this blog, our Southern California readers and those who pay close attention to national reporting probably heard about the teachers strike in the Los Angeles Unified School District which took place shortly after the start of the new year. After a week and a day on the picket lines, the United Teachers of Los Angeles reached an agreement with the district to return to work in return for a pay raise, smaller class sizes, increases in nursing and counseling staff at school sites, and a “study” of the efficacy of charter schools which the union hopes will blunt the momentum for their growth. It also included the highly self-serving promise by the LAUSD brass to help the union lobby Sacramento for higher taxes and more funding for schools.
The deal, while seen as a victory for the union, raised some unavoidable questions about whether or not the deal was financially viable to the district. The Los Angeles County Office of Education has given grudging approval to the deal, but continues to warn that the district must reckon with its unfunded pension liabilities and bring down the percentage of the LAUSD budget that goes towards retired staff in order to ensure long-term fiscal stability.
So, faced with new financial obligations in the wake of the strike and having made no progress on dealing with the pension tsunami nor the continued drop in enrollment which doesn’t bode well for the future, the district and the union are going to that old standby: raising tax revenue on the schmucks and schmendricks who continue to live here. As part of the settlement with the union, the district had already promised to help lobby for a Proposition 13 split-roll, in which some of the property tax protections enjoyed by business owners for commercial property would be rolled back and the property would be taxed at closer to the current value rather than the original purchase value. This is a favorite idea of state Democrats, who promise that most of the $11 billion expected to be raised by this tax will be funneled back to local governments. But considering that a Prop 13 split-roll has already been floated as the answer to K-12 education, higher education, high-speed rail, single-payer health care, and pension backfill, it seems pretty likely that the money will disappear in the California budget morass with making only minimal progress in education funding.
With the passage of the split-roll being far from assured, the LAUSD and UTLA are additionally proposing a parcel tax for Angelenos, in the expectation of raising at least $500 million earmarked for K-12 education in the LAUSD. There are two possibilities for the plan that are being floated: a flat $537 tax per lot irrespective of property size, or a sixteen-cents-per-square-foot tax which would see owners of the larger city lots paying a higher tax.
The cynicism with which this tax is being proposed is breathtaking. LAUSD hopes to have this parcel tax brought to the voters no later than this November’s election, with the possibility of placing the measure on the June 4 municipal election if LAUSD can prepare and submit the ballot materials in the next few weeks. The parcel tax is a form of hedging the district’s bets in case the voters don’t agree to the Prop 13 split-roll when it appears on the November 2020 ballot, and though for the time being the education blob wants everyone to believe that the parcel tax and split-roll represents an either/or choice, it’s a certainty even if the parcel tax passes later this year that the district will continue to support the split-roll idea next year. The timing of this is obvious, as the UTLA contract with the district runs out at the end of 2022 and by then the union will no doubt have more demands to issue, especially should both tax measures pass. All this, of course, without any concessions to fiscal sanity from the district.
As we have discussed ad nauseam here, California is a very left-wing state in which Democrats and their allies almost always get their way. The votes on the parcel tax and the split-roll will go a long way towards establishing wether there remains any sense of fiscal sanity in this state, or if we have completely surrendered to big government progressives who believe that everything could be made better if only the government had just a bit more of our money. If the decision is to continue to tax ourselves without respite, expect the out-migration trend among families with children and the middle class to continue.