Jennifer Bestor / commentary
March xx, 2014

Jennifer Bestor

Jennifer Bestor

Should California schoolchildren be the state's involvement-free lenders of first resort? Near people would say no. Yet they are.

Should California, in opposition to the equitable school financing principles outlined in Serrano v. Priest, have the almost stable, reliable, local funding – holding tax – out of the poorest schools? Most people would say no. But nosotros accept.

Was Suggestion 98 designed to enable coin to flow away from didactics? Most people would say no. And then why has Prop. 98 been shoved into the alien office of "guaranteeing" that schools will be "made whole" despite massive incursions into their funding?

Ten years ago, Sacramento sidestepped a financial crisis. It made California schoolchildren its powerless bankers. Information technology took an enormous $5 billion chunk of their property taxes, predominantly from the poorest schools, to service the country'south debts. Sacramento promised – falsely, it turned out – it would repay the funds, that Prop. 98 would strength it to do so, completely and promptly. No one said boo.

Over that decade, the value of the lost $5 billion in property taxes has grown to $7.half dozen billion. Prop. 98,  requiring that the state meet its "guaranteed" level of K-12 spending, has been suspended twice. We are now in the sixth year in which the state has not paid schools promptly, deferring a sizable portion of base funding until afterward the finish of the school yr. These interest-free deferrals accept cost individual California schoolchildren heavily as schools have had to incur borrowing costs and make cuts in instructional time, staff and programs. And nosotros, California parents, are saying boo – at present, when the situation could be reversed and all parties made whole.

Roots of the trouble

How did this all happen? "Proposed Initiative Would Give School Districts Back Their Property Taxes" (EdSource, Feb. xiv, 2014) explains how Sacramento redirected property tax from schools in 2004 to pay two obligations it was having trouble paying directly: deficit-financing Economic Recovery Bonds and local authorities losses due to the political decision to reduce Vehicle License Fees (VLFs). The state transferred, first, over $ane billion a year of instruction-allocated holding tax to fund the deficits, then added, second, $iv billion a twelvemonth to fund the VLF cuts. The first incursion was tied to sales tax growth and had a sunset clause. The second was tied to the growth in property valuation and had no end engagement; over the decade, it has grown to $two billion a year more than its underlying obligation. The land promised that Prop. 98 would "make schools whole."

Merely how? Who would provide the actual greenbacks? Prop. 98 couldn't mint money, and then Sacramento would have to lower other spending. On what? Corrections? Fire? Police force? Debt? Health? Welfare? Highways?

"On what" has become articulate: Education. The latest NEA statistics evidence that from 2003-10, California fell from 31st to 42nd in the nation in expenditures per student (from 90 percent to 81 percent of the national boilerplate), while the country climbed from 5th to 3rd in per capita spending on police and burn (after only Washington, D.C., and Nevada; 45 percent in a higher place the national boilerplate) and from tertiary to 2nd place in per capita spending on corrections (after only DC; 62 percent above the national boilerplate). We're number 8 in debt service; 15th in majuscule project outlay; 18th in wellness and hospitals; 27th in public welfare. Only in highways practise nosotros practice almost (but not quite) equally desperately as our K-12 schools, where we compete with South Carolina, Utah, Texas and Tennessee – before adjusting for cost-of-living differences. Recall, $7-plus billion of our land Full general Fund "spending" on schools is only repayment of state debt.

John Maynard Keynes said, "Owe your banker £thousand and you are at his mercy; owe him £1 million and the position is reversed." Well, California owes our schools over $vii billion every unmarried year, and our schools are clearly at the state'due south mercy.

Starting into the second decade of diversions, we've been put on observe that the state volition redirect $8.iv billion of stable, reliable, local school funding in 2014-15. At present, you lot may ask, aren't we finally getting more coin in Prop. 98, and isn't the governor proposing to end deferrals entirely, so that for the offset time in vii years, schoolchildren will be paid on time?

Yeah, but in the next breath of his Budget Summary, he reminds us that we're four½ years into an economic expansion, which lasts five years on average, 10 at the almost. So adjacent year, iii fiscal years later a major revenue enhancement package, schools may finally become what they're owed on fourth dimension.

Shaking down poorest districts

And when things get crude once again? As it turns out, the poorest counties and school districts are hitting the hardest by diverting property taxes from schools to pay off the state'south debts. That would likely recur in the next recession, when Prop. 98 money again gets shorted or deferred.

As evidence, accept a disquisitional look at the only-published P1 Chief Apportionments schedule detailing the first $3.7 billion of this year's total $6.1 billion deferral package:

The poorest counties do worst because of the style the Legislature structured the deal hijacking property taxes from schools in 2004. The diversion was based on population, not county wealth. School districts in depression-property-wealth counties like San Bernardino, Sacramento, Fresno, Majestic, Tulare, Merced, San Joaquin and Stanislaus will encounter a very large percentage of their belongings tax funding removed, and – thanks to deferrals of their state assistance – not see whatsoever of these diverted property taxes repaid this school year. (Yuba will lead the pack on June 30, even so owed every penny of the $x million of education-allocated property taxes directed away from its schools – and another $8 one thousand thousand besides.) These counties also feel half-dozen of the seven largest gaps in the state between their Local Control Funding Formula 2020-21 target per-pupil spending and their current per-student allocation.

Second, poorer districts in richer counties volition do badly.

San Mateo, Napa and Marin Counties had relatively frugal county and metropolis governments when Suggestion 13 striking in 1978; and so they have high property tax allocation percentages directly to their school districts – and savor loftier property values. Hence, they have a number of significant basic-aid districts, funded almost totally through holding taxes. Since no belongings taxation is diverted from basic-aid districts, neighboring revenue-limit districts run across much higher proportions of their own base property tax diverted: 100 percent in the instance of districts like East Palo Alto's Ravenswood, Redwood Metropolis, and Daly Urban center'due south Jefferson Elementary districts. So, while San Mateo Canton districts on average will simply run into 23 percent of their forced lending unpaid at the end of June, disadvantaged districts wait for much higher percentages of their base funding.

In short, it's education-in-crisis as usual in California.

Four years ago, a group of parents came together, get-go in San Francisco. Why, we asked, in one of the wealthiest areas in i of the wealthiest states in one of the wealthiest nations in the world, were nosotros spending and then little on educating our children? Existence parents (the ultimate outsiders in instruction), we have spent four years listening to every exhortation and apparition caption possible. In the end, nosotros simply followed the coin. And we realized that, as hard as we work to pour it in the height, someone else works twice as hard to suck it out the bottom.

It'south fourth dimension to say boo. Brainwash Our Country has filed an initiative, the Protection of Local School Revenues Act, to return stable, reliable, growing local property taxes to California'southward schools in 2015. Doing and so will, in turn, gratuitous up an equivalent amount in the state Full general Fund, assuasive the state to pay its own debts out of its own coin.

Why tin can't we make time to come schoolhouse funding announcements about what schools get, not what they'll have to wait for? Because to us, bluntly, it's not plenty that someone else feels they have a better utilize for our school kids' money. Involvement free. Repayment negotiable.

For over 100 years, the California Constitution has fabricated information technology articulate that education is California's first funding priority. First.

Jennifer Bestor is the volunteer director of enquiry for Educate Our State, a grassroots, parent-led organization advocating for systemic modify to provide all students with a high-quality public education. A California native, Jennifer became a stay-at-home mom after 20 years in banking and high applied science. Asked to serve equally treasurer of her child's California public schoolhouse parent-instructor organization, Jennifer soon found herself answering school finance questions, which meant dissecting acquirement flows and property tax diversions.

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