Monday Morning Thoughts: Local Control Funding Formula and the Parcel Tax

local-control-formula

Back in 2013, Governor Jerry Brown signed into law the funding model for school finances known as Local Control Funding Formula (LCFF). As many know, the idea behind LCFF was to support underperforming students by directly attaching funding to needs such as low-income students and English learners.

While, according to Superintendent Winfred Roberson, about 27 percent of DJUSD students fall into these categories, Davis is somewhat disadvantaged by this process.

In an op-ed last spring, Superintendent Roberson wrote: “The Local Control Funding Formula estimates that in the coming year, $3.4 million in new LCFF funds will flow to the Davis schools. This is good news and reflects our optimism that things are getting better for our schools. However, this new LCFF money must be divided among the ‘must do’s’ (state and local requirements) and the ‘want to do’s.’

“Right now, the mandated costs total about $2.2 million, including $800,000 for increased pension costs, $400,000 in restricted maintenance contributions, $300,000 in LCAP [Local Control and Accountability Plan] supplemental services for target populations as well as locally allocated priorities of step-and-column increases, class-size reduction costs and other costs that total $650,000.

“The estimated remaining $1.2 million is available for deficit spending reduction, collective bargaining and all other services and district goals.”

The situation, however, improved in May. According to a statement from the county, “The May Revision State General Fund revenues increased from the January proposal by $6.7 billion over the three-year forecast period: 2013-14, 2014-15, and 2015-16. K-14 schools will receive $5.5 billion of the new general fund revenue which, with the inclusion of additional local property tax collections, produces an increase of over $6 billion in Prop. 98 funding. The Governor now estimates 2015-16 Prop. 98 spending at $68.4 billion. While most of the Governor’s spending will be targeted toward one-time investments, K-12 schools received $2.4 billion in additional ongoing spending, most of which is directed toward 2015-16 Local Control Funding Formula (LCFF) gap funding ($2.1 billion).”

For DJUSD, that translated into nearly $10 million in new money. However, about $5 million of that was ongoing while $4.6 million of that is one-time discretionary funds.

School-Budget-2015-16

The difference between one-time and ongoing money is critical, because while one-time money can go to a specific project, ongoing money becomes part of the budgeting formula into the future.

The LCFF increase was used by the district in part to mitigate structural deficits in multi-year projections. In 2014-15, the district still had a $3.5 million structural deficit, while by 2015-16, it had a $3.5 million surplus.

The General Fund has increased this year from $74 million to $82 million, but, again, $4.6 million of that is one-time money.

School-LCFF-2015-18

The district is projecting more modest LCFF funding changes of $2.7 million and $2.8 million in the next two school years.

Meanwhile, the district has to figure out what to do with the parcel taxes – Measures C and E, which were approved in 2012 and generate roughly $9.5 million annually for the school district. Both will expire in June 2017.

While the chart shows that the LCFF funding growth will somewhat exceed the projected COLA (Cost-of-Living Adjustment) for the district, the numbers are relatively close.

There will be a lot of questions about the renewal of Measure E. Back in October 2012, Barbara Archer, now a school board member, and twelve other people wrote an op-ed published by the Vanguard.

At that time, they wrote, “The opposition will say that Measure A was supposed to be an emergency tax. We are still in a fiscal state of emergency. In fact, it’s worse that what it was 2 years ago when Measure A was passed.”

They added, “We cannot imagine what $6.9 million of cuts in one year would look like (on top of the $10 million we have already lost over the last five years).  It will be catastrophic. All cuts are on the table at this point – school closures, massive layoffs, extensive reductions in core programs.”

The fact is that the district is no longer in an emergency, but even with the LCFF increases for last year, this year, and the projected ones the next two years, it is hard to see the district being able to shed $6.9 million let alone $9.5 million.

That is the revenue picture for the school district.

—David M. Greenwald reporting

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  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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40 comments

  1. “The opposition will say that Measure A was supposed to be an emergency tax. We are still in a fiscal state of emergency. In fact, it’s worse that what it was 2 years ago when Measure A was passed.”

    I think that Ms. Archer’s statement brings up an interesting point about the attitude of many towards taxes. There seems to be an assumption that if a tax is passed due to an “emergency” that when that “emergency” is over, the level of taxation should automatically drop back to what it was prior to the “emergency”. What this idea neglects is the reality that some costs will increase naturally over time due to inflation, some will increase due to natural infrastructure decline over time, some may increase because of newly identified needs or expansions of desired programs, and some may increase because of new program mandates. Any of these, or a combination thereof, and probably many others I neglected to mention may lead to the the need for more tax revenues.

    For me, the argument, “well we just passed an emergency parcel tax in whatever year, and now you are asking for more” while true, is simply irrelevant. What is relevant in considering the need for more funding is current and future projected need not what was needed or provided in the past.

  2. Two other factors in the equation:

    The Borikas case means that at present the district cannot propose a $20/multi-family unit.  Measure C had the $20 rate, Measure E did not.  In total it means that Measure C would bring in less money if it were directly renewed, because the $20 rate cannot be continued.

    Also, the Prop 30 0.25% state sales tax directed toward education expires at the end of 2016.  It is unclear what impact that will have on the education budget.  The higher income tax assessment on higher incomes expires in 2018.

  3. Here we go, the politicking is already starting for a new school tax.

    well we just passed an emergency parcel tax in whatever year, and now you are asking for more

    We were talked into another school tax because we were told it was an “emergency” but the truth of the matter is once any gov’t agency gets their hands on any new money they never want to give up that inflow.

    Another example was the half cent sales tax renewal in 2014.  Not only did the city get a new half cent tax added they also extended the temporary half cent tax that was supposed to sunset.

     

      1. Two points.

        Point one is that your example of the politicking already starting is my quote from 2012.

        Point two last week, it might have been you, asked if we needed the parcel tax, the numbers from the district suggest that we at least need some of the parcel tax.

  4. Any time a new parcel tax is passed for “emergency purposes”, the entity involved becomes dependent on the funding generated from the new parcel tax – it becomes intertwined in the budgeting process so it is inextricably part of it.  Subsequently, it is almost impossible to “wean” the entity from dependency on the funding from the “emergency tax”, which eventually becomes in effect an ongoing funding stream.  The “emergency” designation eventually drops away, and citizens continue to pay the tax every time it is about to sunset – as long as they feel the money is being spent responsibly.

    However, after volleyball gate, there are going to be some tough questions about how school parcel tax money is spent.  $22,000 wasted on a needless formal legal investigation that could have taken place in-house for little or no cost is highly questionable to a lot of folks.  Why the MPR at DHS was not maintained properly and allowed to accumulate dangerous mold is going to be another issue to raise its ugly head.

  5. If we end up with YET ANOTHER parcel tax to fund our local schools, I suggest we name it the Illegal Immigrant Education Fund parcel tax.   Because LLCF was basically a scheme to take money from the well-performing schools in affluent areas, to give more to the low-income area poor-performing schools.  And the flood of non-English speaking illegal immigrants has increased the scope of low-income area poor-performing schools.

    Ideally though we say “no” to any more taxes for the schools, because CA teachers are some of the best compensated teachers in the world, and CA spends more per student than most of the industrialized world… many that demonstrate much better education outcomes.

    We really do not have a funding problem with respect to education, we have a spending problem.  We are getting too little education value per dollar spent.  Just giving the system more money will not solve the spending problems… it will make them worse.

    1. a scheme to take money from the well-performing schools in affluent areas, to give more to the low-income area poor-performing schools.

      If I recall (I could be wrong) the governor increased funding to the schools overall, but increased it more to low-income-area schools than to high-income-area schools. So it didn’t “take money from the well-performing schools in affluent areas.”

      1. What’s happening is that money that was cut from all districts in the recent recession is being restored more slowly to districts where the population is more educated/affluent, and more quickly to districts with more “at risk” students — lower income, more ELL students, lower family education.  That’s how the narrative of “taking money from well-performing schools” arises.  Partially true, but more complicated than the face value statement.

    2. Frankly:  Because LLCF was basically a scheme to take money from the well-performing schools in affluent areas, to give more to the low-income area poor-performing schools.  

      By raising the issue that way, aren’t you engaging in class warfare?

      1. By raising the issue that way, aren’t you engaging in class warfare?

        Not really because I don’t see most of those people as having a legal right to be here.  I don’t care if they are white Europeans.   I don’t care if they are rich or poor.  But because they are mostly poor and uneducated, I am making the point that this is another of many negative financial impacts on the people of this city and this state.

        Illegal immigration is costing us much more than it benefits us.

        I guess if we want to take it to the next level, it is a tax on wage-earning residents to supplement business that want cheap blue collar labor.

        Hypothetically, if we removed all illegal immigrants from this state, many of the poor-performing schools would become well-performing schools and so the allocation of state money would shift so that Davis would see more dollars from the state and we would have less of a need for taxing the local citizens again.

        1. Hypothetically, if we removed all illegal immigrants from this state, many of the poor-performing schools would become well-performing schools and so the allocation of state money would shift so that Davis would see more dollars from the state and we would have less of a need for taxing the local citizens again.

          You can take the “hypothetically” out of that statement.

           

        2. But its mean spirited just the same. Not only that its only partially the problem. LCFF targets three groups, English learners, foster children and low socioeconomic kids. Davis has a short supply of all three so we don’t get as much money as some other districts. So what are we to do? Take away our elementary music and science programs and all the other things our parcel taxes pay for? What is your solution that Davis can actually implement? Or do you simply want to rub peoples noses in it?

          You always want to be a partisan troll but its not so simple. It was a conservative supreme court that said ALL kids were entitled to a public school education no matter their immigration status. It was also a conservative tax revolt known as prop 13 that led to the general defunding of our schools that caused Davis to start back filling its budget with parcel taxes. It was the failure of anti-regulatory conservatives under Bush that lost control of the economy and plunged the local school budget so deep into the red that emergency local funding was sought to bridge the gap. I could go on all day about the failures of conservatives but what is the point. The school district’s financial situation is what it is. Can we try and have a discussion about how to move DJUSD forward that is focused on the world as it is instead of descending into diatribes about things beyond the power of the people of this community?

        3. The other connection has to do with “Black Lives Matter.”

          The flood of poor and uneducated illegal immigrants has exacerbated problems in the black community because it has led to resource shortages in those neighborhoods.

        4. It was a conservative supreme court that said ALL kids were entitled to a public school education no matter their immigration status.

          Not at all.  The Roberts court is anything but conservative.  Except for Citizens United and Hobby Lobby, we have seen no significant decisions by the Roberts SCOTUS that have bent the conservative way.

          I am not making any moral argument here.  It is simply financial.  Monetary consequences for having to care for 12-20 million illegal immigrants and all their children.

          And yes, our kids might have music programs cut to help pay for the education of all those illegal immigrants.

          1. Actually, as far as I can find it was a 1982 Supreme Court decision that mandated providing education for undocumented students. So that would be this court:
            Warren E. Burger
            William J. Brennan, Jr. · Byron White
            Thurgood Marshall · Harry Blackmun
            Lewis F. Powell, Jr. · William Rehnquist
            John P. Stevens · Sandra Day O’Connor
            https://en.wikipedia.org/wiki/Plyler_v._Doe

          2. Also, if they are counted in the Average Daily Attendance, the district receives funding for them regardless of their immigration status.

          1. Not true Frankly. I’m currently reading “The Nine” and if my memory serves me well 8 out of the 9 justices on the Burger Court were Republican appointees, and the lone Democratic appointee Byron “Whizzer” White was right of center and right of many of the Republican appointees.

            EDIT: it was 7 out of 9 by Republican presidents. Thurgood Marshall was the second. When he resigned in 1991 he was replaced by Clarence Thomas, a Republican nominee, which brought the court to 8 out of 9 appointed by Republicans.

        5. Also, if they are counted in the Average Daily Attendance, the district receives funding for them regardless of their immigration status.

          Obviously the funding for each child isn’t enough or we wouldn’t be having this discussion.  So the more children the more in the red we go.  Recently I was talking to a parent in Woodland who was able to sneak her children into a Davis elementary school. They’re fairly well off but won’t be paying the Davis school parcel tax, I will.

        6. The Warren Court was left

          The Burger Court was center… I think center-left based on the its string of opinions.

          The Rehnquist court was center-right

          From my perspective no recent courts have been truly conservative.

          The Roberts court has proven center… but more recently center-left.

           

          1. Roberts court center-left? In what way?

            Here is a link to the Roberts court decisions

            Of the 74 cases decided by SCOTUS in the 2014 Term ( cases decided from October 2014 through June 2015), Scalia dissented in 15. Thomas dissented in 20. Alito dissented in 14. That paints a very clear picture of very low levels of dissent from the three staunchly conservative justices.

        7. “It was the failure of anti-regulatory conservatives under Bush that lost control of the economy ”

          The Financial Services Modernization Act of 1999 was passed on a vote of 90-8 and 362-57 and signed by Clinton severely weakening the Glass-Steagall Act to get the ball rolling for the financial crisis.

          “It was also a conservative tax revolt known as prop 13 that led to the general defunding of our schools”

          The State has several sources of revenue to pay for schools. Tying the inability to raise specifically property taxes to lack of school funding is misleading. Prop 13 was passed to prevent what is going on right now in Chicago where property taxes that are already second highest in the nation are going to rise another 50% this year. A lot of elderly and poorer homeowners would lose their homes if property taxes were not fixed the way they are.

        8. Sam even without arguing the merits of prop 13 public school financing has been its biggest casualty. Before prop 13 California public schools were among the best financed public schools in the nation and since prop 13 we are among the worst. Whatever you think of prop 13 the defunding of public education in this state is one of its major consequences.

           

        9. I think that we disagree on two points, but we might agree on one.

          Disagree: 1. Prop 13 is the main cause of poor education in California. 2. The poor end elderly would lose their homes if property values were adjusted and taxed on value. (House rich, cash poor).

          Agree: The state of California has been unable to establish an adequate education program to educate its citizens.

          In your first post I just don’t think it is a “right” or “left” problem. I think that it is just a problem that needs to be solved quickly and nobody has stepped up to do that.

           

        10. Yes we agree that it is not a partisan problem. I raised the issue in response to a poster who wanted to play the political blame game to show that it is just as easy to argue the opposite and gore the right’s sacred cows. Getting to 2/3 for local parcel taxes shows that its not a partisan issue locally. It would be nice to have the discussion without the hyperbole. Unfortunately there are some who prefer belligerence to reason.

        11. OK, so second thing we agree upon.

          However, I don’t think that it is necessarily a funding issue in the long term. I think that educators need to look what is the best way to educate the current population. For example, children no longer need summers off to pick crops. We keep summer vacation because “that is what teachers signed up for”, but it is not the best way to educate a child. I would like to see a plan that shows what is best to educate the children, than we can figure out how to pay for it.

  6. You sure like to double down on mean spirited. So how about Reagan who pushed through immigration reform. I suppose he was too liberal for you too. But none the less you still want to wallow in race and class bashing but this does nothing for kids in the local public schools or help us figure out what we should do to help the kids in this community. After all your premise is our local kids would be better off if we didn’t have to be part of the rest of California with all its problems that are impacting the local community. So once again instead of lamenting the world as it is as opposed to your desire for how it should be I ask what should we do with our schools to make sure our kids get the best education possible and how do you plan on paying for it?

    1. I love this claim that I am mean spirited for simply stating the facts.

      So, if truth is mean spirited, we should lie just so we are seen as kind-spirited?

      I am not making any argument for deportation of the current population of illegal immigrants.  I am simply making the point that the cost of illegal immigration includes the possibility that Davis cannot afford to fund some of its extra programs.

      Remember too that some federal and state increases in taxes and fees are also directly and indirectly caused by the need to provide funding for all these poor and uneducated illegal immigrants.  When Davis schools come asking for another tax to help fund the local schools, local residents look at their total tax bill to see what they think they can afford.   And having already been forced to accept federal and state tax and fee increases, there is less in the kitty to pay for new local tax increases and more people vote no.

      You see, this is the problem.  It feels good to be so generous to these people flooding here illegally.  It feels good until we run out of other people’s money to pay for that and all the other things we want.

      Life is about choices we make and their consequences.   Sounds like you might not be willing to accept the consequences.

      1. I think that the people in Davis who are deeply concerned about illegal immigration already overlap with those who would vote against a parcel tax. In other words, that is probably not a factor here. But the sheer number of different things people want to propose parcel taxes for, and the total dollars that are beginning to add up on tax bills, might eventually make that 2/3 vote harder to achieve. So a sports park tax and a roads tax and a schools tax and whatever else tax all on the ballot together? Probably not a very good idea.

        1. Of course, there are also those who will vote against a parcel tax because they are skeptical of the intent of certain members of the School Board to spend the money wisely. Oink!

    2. So how about Reagan who pushed through immigration reform.

      Reagan made a deal with Congress to fund border improvements to staunch the flow as a condition of amnesty.  That never happened and it is the primary reason why Republicans and conservatives do not trust politicians on immigration and will not agree to immigration reform unless we seal the border adequately as the first step.  And Democrats and liberals don’t support that because they like the flow of reliable left-leaning voters coming to this country.

      1. Frankly:  That never happened and it is the primary reason why Republicans and conservatives do not trust politicians on immigration and will not agree to immigration reform unless we seal the border adequately as the first step.  And Democrats and liberals don’t support that because they like the flow of reliable left-leaning voters coming to this country.

        Actually, if Republicans were viewed as friendlier to immigration than they are, I think most of the Latino immigrants would tilt Republican in far greater  numbers than you assume.  That was part of the formula for GW and Jeb Bush’s successes.  But when you have prominent candidates out there who support self-deportation (Romney) or Donald Trump’s policy, then even more conservative Latino voters will vote against Republicans.

        I think Trump’s comments and posture have all but guaranteed that Latino voters will line up for Democrats this cycle.  Which is ironic, because all of the Republican political debriefing of 2012 made particular mention of trying to appeal to Latino voters.  But I don’t think the “Freedom Caucus” cares.  The biggest irony is that Republicans had a huge opportunity to attack Obama on his immigration policy.  Obama is probably the biggest deporter of all the recent presidents and could have been vulnerable on a number of fronts.

        The problem is that you can’t separate “illegal” immigrants from legal immigrants as cleanly as you think.  Almost immediately you start separating nuclear families, and if massive deportation takes  place and that fact comes to light, political pressure will swing against that policy.   “Sealing the border” will not necessarily keep tourists from overstaying their visas, which is a very common way to come into this country.

        1. Part of Trump’s popularity with the GOP base has to do with his anti-PC-correctness statements in opposition to the screwed up immigration situation in this country.  It is one of the great frustrations of American voters that own a filter for the sanctity of law that our politicians are not effective at enforcing the law.  Hundreds of sanctuary cities and illegal immigrants killing Americans and filling our prisions. Also, there is a real problem with the depression of blue collar jobs and depression of wages… especially in the construction industry.

          But the rest of the GOP field is not too far off in Latino support.  Rubio is positive.  Jeb is also, but he is toast.

          The bottom line is that the GOP would be stupid to attempt to appeal to Latinos on an “I support amnesty” platform because it will not change their numbers of latino voters much, but it will reduce their support of moderates and independents that are also unhappy with the crappy state of immigration in this country.

          Republicans have always been big supporters of legal immigration.

          The way to deal with illegal immigration is self-deportation.

          1. [moderator] To everyone: just a reminder that the topic of this thread is local schools funding and parcel taxes.

        2. Frankly:  But the rest of the GOP field is not too far off in Latino support.  Rubio is positive.  Jeb is also, but he is toast.

          The Latino vote is not as monolithic as you might think.  Rubio and Cruz being Latino doesn’t mean that they naturally connect politically with Mexican-Americans or Central Americans.

          But then there is this:

          Why Asian Americans don’t vote Republican

          In the 2012 presidential election, Barack Obama won 73 percent of the Asian-American vote. That exceeded his support among traditional Democratic Party constituencies like Hispanics (71  percent) and women (55 percent).

          Republicans should be alarmed by this statistic, as Asians weren’t always so far out of reach for Republicans.

          When we examine presidential exit polls, we see that 74 percent of the Asian-American vote went to the Republican presidential candidate just two decades ago. The Democratic presidential vote share among Asian Americans has steadily increased from 36 percent in 1992, to 64 percent in the 2008 election to 73 percent in 2012. Asian Americans were also one of the rare groups that were more favorable to President Obama in the latter election.

          This dramatic change in party preference is stunning. No other group has shifted so dramatically in its party identification within such a short time period. Some are calling it the “GOP’s Asian erosion.”

          Moreover, Asian Americans as a group have a number of attributes that would usually predict an affinity for the Republican Party.

  7. Perhaps you feel we should not educate all comers as the LOL “centrist”  Burger Court ruled? What would you propose instead of LCFF? By the way many people all across the political spectrum are trying to figure out what to do about districts like DJUSD that were short changed by LCFF. It would not surprise me to see some fine tuning in the next year or two but until that happens we have the current system and a local revolt against whatever unfairness exits only hurts local kids. But it seems that rather than figure out solutions you only want to point out the weaknesses in your never ending crusade of polarized politics. Its easy to tear something down. What is hard is to come up with better solutions.

    Don Shor wrote: “Also, if they are counted in the Average Daily Attendance, the district receives funding for them regardless of their immigration status.” 

    Don you obviously don’t understand Jerry Brown’s funding formula. It has three tiers. Only the first tier is based on ADA.

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