[guest post by JVW]
On Tuesday, voters who live within the boundaries of the Los Angeles Unified School District will go to the polls (though, to be sure, most of them undoubtedly will not) to vote on Measure EE, a parcel tax designed to raise $500 million per year for the next twelve years by imposing a tax of sixteen cents per square foot on business and residential buildings. This tax is the inevitable result of the teacher’s union strike settled this past winter, with district support of this measure being one of the promises made in return for the teachers returning to work.
Naturally, because this is a new tax and because it is ostensibly “for the children,” the editorial board at the Los Angeles Times is all for it, as is the resident let-me-search-for-big-truths-in-cloying-anecdotes columnist, Steve Lopez. The editorial is the usual Dog Trainer mush. After comparing the dollars per student spent in Los Angeles versus those in New York and Boston, and finding the home team wanting, they make the case that upping spending is just what the doctor ordered. Amazingly enough, they dip a toe into the water to acknowledge that maybe, just maybe, LAUSD doesn’t always spend its resources in the most sensible way, and that this tax measure has been rushed and confusing:
There are legitimate concerns being raised about the measure — including how effectively the district will spend the new money, whether the proposed oversight mechanisms are strict enough, and even about which structures will be taxed at the proposed rate of 16 cents per square foot. What’s more, the measure has been hurried onto the ballot in a June 4 special election that will almost certainly draw dismayingly few voters. The crafting of the language and the setting of priorities moved at a pace that was faster than ideal.
But hey, what’s the harm with a little bit of ram-rodding where money for the kids is concerned? The editorial also makes this economically-illiterate assertion:
Commercial, industrial and institutional landowners would pay the lion’s share, which is a major reason various business organizations are vehemently against the measure. Landlords of apartment buildings also would be significant contributors and might pass that expense along to renters in non-rent-controlled buildings.
This is Bernard Sanders-level ignorance of how markets work. So that warehouse, factory, or hotel is going to completely swallow the parcel tax and not pass it along through higher prices and rates, and landlords merely might pass it along to renters? Even our Adorably Clueless Marxist Niece is probably laughing at that unfathomable level of naïvete. And, as a commenter on the article noted, the Dog Trainer is hardly in a position to demand that Los Angeles businesses suck it up and accept a tax increase, seeing as how they moved their headquarters from downtown to El Segundo last year (one decade after moving printing operations from the San Fernando Valley to Orange County) and thus wouldn’t pay a cent towards the new tax.
For his part, Mr. Lopez starts with his usual anecdote and then tries to derive larger meaning from it. He meets up with the LAUSD Superintendent, Austin Beutner, and the head of the teachers union, Alex Caputo-Pearl, naturally at a city school of working class and immigrant families, where the two former rivals unite to deride the city’s business interests for being wary of the tax. Magnanimously, Mr. Lopez acknowledges that perhaps the business interests have a point:
It’s not hard to understand voter weariness over repeated demands for yet another tax to pay for problems that never seem to get solved, especially in the case of a school district that hasn’t always been particularly well run. L.A. Unified has agreed to pension and healthcare obligations without budgeting for the cost, it’s been embroiled in more than a few scandals, and declining enrollment means less revenue going forward.
But hey, he goes on to assure us just as the editorial board did, this time it will be different. He points out that the district and union agreed on a new healthcare program for current and retired district employees which allegedly will save the district $50 million over five years through — don’t roll your eyes now — “more efficient” spending. Never mind the fact that district employees and retirees still pay zero in monthly payments or service copays. Maybe Mr. Lopez ought to have read an article that his own newspaper published just last year:
The 60,000 employees of the Los Angeles Unified School District are not among the nation’s highest paid, but most enjoy comprehensive medical benefits for themselves and their families without paying monthly premiums. Such subsidies are rare in the workplace.
[. . .]
Healthcare costs are a major stress on the nation’s second-largest school system, particularly coverage of retirees. The district pays more than $20,000 annually for the healthcare of each retiree who is too young to qualify for the federal Medicare program, said Najeeb Khoury, the district’s chief labor negotiator, in an interview. Older retirees use district benefits as a healthcare supplement to cover what Medicare doesn’t, which costs the district about $7,100 per person each year.
As of January, the district was providing benefits for 4,768 pre-Medicare retirees and paying for supplemental coverage for 31,533 retirees old enough to receive Medicare. Retiree health benefits cost the district nearly $328 million in the 2016-17 school year, close to 6% of the budget.
Asking 100,000 active and retired teachers and an equal number of dependents to chip in a minuscule $50 per month each for a health plan — a tiny amount roughly equivalent to what I paid in my first job 30 years ago — would save the district $120,000,000 per year, or approximately 10% of what is currently spent on health benefits. Understand that the union has openly prioritized maintaining lavish benefits during contract negotiations, even at the expense of salary increases, so don’t spend too much time lending any credence to their complaints about being underpaid. Shouldering a small part of the health insurance load might have been a nice peace offering for the teachers to make before demanding another $500 million annually from the taxpayer, but the district and union have determined that the wind is at their backs, so it’s onward to Tuesday to see how gullible the voters of Los Angeles truly are.
Oh, and by the way, LAUSD has done itself no favors by sending out a mailing to senior citizens informing them they are eligible to receive an exemption from the tax, should it pass, but also including the exemption form which asks for all sorts of personal information. It’s also somewhat possible that the tax could pass (a two-thirds majority is required) but then be blocked in court because the district foolishly modified the ballot language (twice!) without going through the proper procedures. Given how badly they have botched this campaign, why would anyone think giving LAUSD more money to waste is a solid idea?