By David M. Greenwald
Executive Editor
Davis, CA – It is nice to see our old friend, former City Councilmember Michael Harrington resurface with a letter to the Davis School Board. Unfortunately, Harrington has repeated inaccurate and misleading information about school financing.
Referencing the district’s decision to renew the current parcel tax, Harrington writes, “The policy I strongly disagree with is the one where they invite in hundreds and hundreds of out-of-town families to fill up our school buildings so the DJUSD doesn’t have to make hard choices to close a school (or two), and lower our taxes.”
This repeats the often stated, but faulty belief that if the school district would simply – in the words of some – “right size” the school district, through the closing of schools, the parcel tax would not be necessary.
In reality the school district has two distinct problems that it needs to address.
The first is that under the current system of school financing, school districts like Davis which are fairly affluent with a low total of disadvantaged children, are relatively disadvantaged.
As the result of LCFF – which provides school districts with larger Title 1 populations a greater amount of resources, but means that districts like Davis have to make up for a slight shortfall through local parcel taxes.
That is a separate issue from the out of district transfers. Eliminating the out of 
district transfers – even if you could reasonably do that – would not eliminate the need for the parcel tax. (In fact, potentially just the opposite).
What has happened is a relatively large and growing number of UC Davis Staff and Faculty and District Employees are not able to live in Davis – either because they can’t afford housing or because there is a lack of available housing. As a result, they drive in to Davis each Davis and have the options of sending their kids to DJUSD.
The challenge for the district with the increased cost of housing and the reduction of the number of families with children residing in Davis, the district faces the prospect of long term declining enrollment which as I have previously explained is a huge challenge for the district’s finances.
That problem is not fixed by closing a school or two.
Why? Because the underlying problem is not the absolute size of the district but rather the year over year decline in enrollment.
The district has utilized out of district transfers to stabilize enrollment year over year. However, most projections are now showing even with that continuing, the district is going to be shedding students every year over a long period of time. That means each year, the district may lose between $700,000 and $1 million in ADA money.
That problem is not solved by simply closing a school. Why? Closing a school will save some money in the short term, but if the enrollment continues to decline, each year the school district will have to continue to find ways to cut spending.
As previous articles have noted, in general, the school district can only save about 60 cents on the dollar. That’s because a large amount of expenditures are fixed costs and the district benefits from economies of scale which reverse as the number of students decline.
In short, you could close a school, save money, but next year, your students are declining and you will have to make additional cuts. So ultimately, closing a school is only a very temporary bandaid and it doesn’t solve the problem.
Harrington also notes, “Additionally, I view under-populated school infrastructure as an invitation to develop exterior neighborhoods just to populate the schools and fund the surplus personnel and half empty buildings.”
The reality is that the state is mandating the city to grow regardless of what the schools ultimately decide to do. This RHNA cycle the state is requiring 2075 units including nearly 1000 low income units. The city is estimating that the next RHNA cycle, that number might increase to 4000 and 2000.
IF the city is already having to add housing, building housing that allows young families with children to move to Davis – many of them young faculty members or DJUSD staff – then we can stabilize our student population while we meet state requirements for housing.
Ending out of district transfers isn’t going to make these challenges go away – just the contrary – it could exacerbate existing problems. Moreover, as I have pointed out, even if you could shrink the size of the school district, you are looking at a 14 year horizon to do so – a time period where the district would be losing millions in ADA money which will put even more pressure on the district to raise taxes.
I agree with Michael Harrington here. David, most of your points don’t make any financial sense to me.
That’s largely because you haven’t made an effort to familiarize yourself with the numbers.
But let’s simplify for the sake of argument.
There are two separate populations here. One is the out of district transfers – we’ll call that X.
The other is local district population – we’ll call that y.
What Harrington is proposing is getting rid of X.
The problem is that Y is actually decreasing by let’s say 15 students per year.
So how does getting rid of X, solve the problem of Y?
As Harrington stated, DOWNSIZING.
I’m not going to get in a back and forth with you over this as it has been covered ad nauseam on this site over the years.
We’ll just have to agree to disagree.
You said, “most of your points don’t make any financial sense to me.”
That means that you don’t understand the finances involved. You can agree to disagree if you want, but if you don’t understand the finances, then you have no basis for agreeing with Harrington.
There are two discreet populations. One of them is decreasing. The one that Harrington is talking about downsizing is not the population that is decreasing and therefore his solution doesn’t solve the problem. Does that make sense to you?
The most important point is that the state has created two different pots that districts pay out of. One is the LCFF which comes from the state and pays for operating costs. This is allocated on a per student basis and adjusted for relative community affluence. It was in response to the 1976 Sierra court decision. Very little of this comes from local taxpayers. Reducing students means reducing this funding one for one. It really doesn’t help the district financially to cut enrollment.
The second pot is for facility investment, much of it to pay off bonds. This is what the parcel tax largely goes for. This is a given fixed cost that cannot be changed without risking the district’s credit rating. Keeping enrollment up actually lowers individual tax burdens by spreading it over a larger tax base. So calls to cut enrollment will INCREASE individual taxes, not reduce them. If the district sells some of its land, it can reimburse only the capital cost side of the equation, but the likely sales receipts won’t make a big dent in the remaining indebtedness.
And all of this is more complex than how I described this here. Simplistic solutions will not work in the way intended. It will require a deeper understanding of the situation before deciding the best path forward.
Harrington is sprouting outright misinformation, not just faulty information.
What has happened is a relatively large and growing number of UC Davis Staff and Faculty and District Employees are not able to live in Davis – either because they can’t afford housing or because there is a lack of available housing.
The above statement cherry picks two reasons (valid ones) why the growing number are not living in Davis. Then the politically convenient erroneous conclusion is thrown out there as a campaign sound bite.
What David has chosen to ignore is that a substantial proportion of the “growing number” choose to live outside Davis for quality of life reasons. They are perfectly able to live in Davis, but after weighing all the factors, they choose to live in a location that gives them the best of all worlds.
That doesn’t mean that the valid reasons that David cites aren’t true for some portion of the “growing number.” It just means that David’s “not able to live” assertion is hyperbole.
The solution to that “growing number” problem is NOT building a bunch of $1,000,000 detached single family homes that the “growing number” can’t afford. The solution is to build all the new homes with “missing middle” amenities and prices. But even if we do that a substantial proportion of the “growing number” will still choose to live outside Davis because of the quality of life that that choice brings them.
From the letter:
The parcel tax funds special programs that enrich the curriculum. Opposing that tax renewal would be directly harmful to hundreds of students.
If you oppose the district’s policy, lobby them or run for the school board. Don’t harm the students.
Harrington could opt out of paying the tax, if he doesn’t approve of it. He has that opportunity. He also benefits directly from keeping the vacancy rate extremely low and rental prices high in Davis.
So many wrong opinions.
Don Shor and Sharla however make valid points. “Right sizing” the schools by reducing inter-district transfers has nothing to do with the parcel tax that needs to be renewed. Nor does LCFF, SACOG housing requirements or DJUSD’s bond debt have anything to do with the renewal.
The parcel tax that needs to be renewed is a post Prop-13 era tax that the community has consistently voted to renew by super-majorities since it was first passed after budget shortfalls brought on by the passage of Prop 13 in 1978.
It pays for things like the music program, the libraries and reading specialists. If you want the schools to continue to provide those services vote yes.
As for the never ending second guessing about inter- district transfers DJUSD has one of the best school finance guys around in Bruce Colby. If there was a better way to run it Colby would tell us about it.
The problem here is that people are projecting their own petty predilections into the debate.
“Davis, CA – It is nice to see our old friend, former City Councilmember Michael Harrington resurface with a letter to the Davis School Board.”
Last I heard from Mike was that letter he wrote supporting the recall of Gavin Newsome.