News

Overall school-bond tax bills to rise 19.5 percent

Board backs higher rate, faster repayment after recession derails original assumptions

Property owners in the Palo Alto school district will see higher tax bills following school board approval last week of a facilities-bond tax-rate increase.

The current tax rate of $44.50 per $100,000 of assessed property valuation under the 2008 "Strong Schools" facilities bonds will rise to $60 per $100,000 of assessed valuation.

That hike, combined with the current $35 tax rate on the 1995 "Building For Excellence" bonds that are still being paid off, will yield an annual tax bill that is 4 percent -- or $422.45 -- higher for a homeowner with the average assessed valuation of $850,000.

The rate increase -- not anticipated when the $378 million "Strong Schools" bond passed with nearly 78 percent of the vote in June 2008 -- will enable the construction program to continue despite the recession-induced lag in assessed-valuation growth that threw off original estimates.

The higher tax rate now also means substantial savings later -- in the neighborhood of $1 billion in financing costs -- because of a sharply shortened repayment period and a lower-cost type of bond.

That savings in financing costs, along with a reluctance to saddle future generations with debt for school buildings being built today, persuaded four of the five school board members to vote for the tax-rate increase in the wee hours of June 13.

Board member Barb Mitchell dissented, saying her concerns about claims made to voters at the time of the 2008 election outweighed the lure of reduced debt service and a shorter repayment period.

Thirteen current and former school district parents, including nine finance professionals and two former school board members, urged the board to shift course and go with the higher tax rate and shorter repayment period.

"The economic disruption of 2008 to present has dramatically changed the assumptions underlying the original $44.50 bond tax rate," stated the letter, which was drafted by district parent and private-equity investment manager Todd Collins, who chairs the Citizens' Oversight Committee for the 2008 Strong Schools bond.

"Rather than choosing between issuing onerous capital-appreciation bonds or canceling needed projects, we propose an alternative that takes advantage of the current low interest rates and saves our community hundreds of millions of dollars in compounded interest."

Sticking with a lower tax rate, the letter said, would force repayment on the 2008 bond to be stretched out over the next 45 years.

Under the new plan, the combined tax rate for the two bonds will be $95 per $100,000 of assessed valuation in 2013, declining over the next eight years to less than $65 after 2021. The 1995 Building for Excellence bond will be fully paid off by 2024.

Besides Collins, signers of the letter were: former school board member and Bond Citizens Oversight Committee member Ray Bacchetti; oversight committee member Scott Darling; finance professional and former board member of Palo Alto Partners in Education Elisabeth Einaudi; finance professional Stephen Godfrey; lawyer Walt Hays, who signed the ballot argument for the 2008 Strong Schools bond; financial professional David Hornik; municipal bond professional Tony Hughes; small business owner and finance professional J.R. Matthews; finance professional Anne Rockhold; finance professional Greg Sands; finance professional and former oversight committee member Steven Shevick; and former school board member Don Way.

At the June 12 board meeting, which went past midnight, Hays -- grandson of the Presbyterian minister and school board president for whom Walter Hays Elementary School is named -- urged the board to raise the tax rate.

"The citizens of Palo Alto have shown over and over again they like to deal with issues head on and not put them off to burden future generations," Hays told the board.

"One really good demonstration of this is that so many voters rallied to pass the latest school bond by over 70 percent, so it seems inconceivable that we'd want to saddle future generations with $1.3 billion in unnecessary costs by keeping the current tax rate.

"I recognize it is a burden to double your tax rate, but I think Palo Altans have shown they're willing to accept those burdens to maintain their very precious and highly valuable schools that everybody wants to move here so they can join."

Most board members appeared to agree with Hays.

"Given the huge change in the financial landscape since the (2008) bond election, the question is whether to bear a larger burden now from facilities we'll benefit from soon, or push off the payments 35 years," board member Dana Tom said.

Board President Camille Townsend said, "As a taxpayer and as a member of the school board with children, and thinking about the future, it seems to me that saving this kind of money for taxpayers makes sense."

Superintendent Kevin Skelly said he would prepare a letter to district taxpayers explaining the change.

The 2008 Strong Schools bond program is modernizing and adding facilities at all 17 campuses in the Palo Alto district in response to rising enrollment. Major construction -- including, in many cases, new, two-story classroom buildings -- is completed or in progress at Gunn and Palo Alto high schools, Jordan, JLS and Terman middle schools and Ohlone, Fairmeadow and Duveneck elementary schools.

Comments

 +   Like this comment
Posted by teacher
a resident of Barron Park
on Jun 22, 2012 at 9:12 am

PAUSD doesn't need money! They have more money than they know how to spend. When I was a teacher there I was encouraged to use up in full allotted budget even though I didn't really need to buy any additional things.


 +   Like this comment
Posted by Chris Kenrick
a resident of Old Palo Alto
on Jun 22, 2012 at 9:23 am

Teacher,

The bond money does not go for classroom supplies. It is for updating old buildings and adding classroom space, possibly even a new school, to deal with enrollment growth. The rate increase won't create more money for PAUSD. It will make the repayment period on the bonds already authorized by voters shorter and cheaper.


 +   Like this comment
Posted by FEH
a resident of Embarcadero Oaks/Leland
on Jun 22, 2012 at 9:54 am

Didn't we just see an article about teachers and administrators getting another raise because of the district budget SURPLUS??

Drive around and look at all the building going on at the schools!


 +   Like this comment
Posted by Chris Kenrick, Palo Alto Weekly staff
a resident of Old Palo Alto
on Jun 22, 2012 at 10:06 am

FEH,

The teachers and administrators did not get a raise. The teachers union is asking for a onetime 1 percent payment and the school district has not acted on the request: Web Link


 +   Like this comment
Posted by FEH
a resident of Embarcadero Oaks/Leland
on Jun 22, 2012 at 10:27 am

My point is not their requested raise but the reported budget surplus in the midst of this huge school building boom.


 +   Like this comment
Posted by Mom
a resident of Old Palo Alto
on Jun 22, 2012 at 10:33 am

Interesting that news like this comes in the summer, when families are not at school every day and communicating with each other as regularly.
The summary is: Palo Alto homeowner taxes are going up for next year and teachers want to grab the surplus from this year. I am so aggravated by this kind of decision-making.


 +   Like this comment
Posted by David Pepperdine
a resident of Another Palo Alto neighborhood
on Jun 22, 2012 at 10:42 am

This whole argument is soooo bogus!

First, off if the district has a surplus in one area, they should redirect the excess funds towards buildings and classroom space, rather than asking taxpayers to pay more in these austere times.

Second, I don't buy the argument that we'll save all this money by taking advantage of the low interest rate environment. Once we accelerate the expenses (arguing that we'll save money), what do you think the district is going to do after that? Sunset the higher taxes? Wanna bet that they'll put another measure on the ballot right after the higher tax rate pays off the current dues?

This is unconscionable!


 +   Like this comment
Posted by mom + teacher(not pausd)
a resident of Professorville
on Jun 22, 2012 at 10:45 am

If there is a surplus why increase our taxes. The PAUSD teachers are paid more than other districts + get lots of funds for classroom supplies. Why not give us homeowners a break?


 +   Like this comment
Posted by neighbor
a resident of Greenmeadow
on Jun 22, 2012 at 10:53 am

The non-rich residents are going to get taxed right out of Palo Alto.

@Chris Kenwick -- the teachers DO get raises, automatically, every year for the first 12 years (step increases), with added raises for continuing ed completed. Additional raises are given at years 13, 16, 20, 25, and 30 after positive evaluations. Special credentialing and a Master's degree also earn raises (as they should), so it's not really accurate to say teachers have not received raises. It is accurate to say they have not (yet) received a raise from the 1% "surplus" this year and have not received COLA for 3 years. I'm a state employee and have not received a COLA for 5 years and step increases were halted 5 years ago as well. While I believe that good teachers are worth their weight in gold, I also believe any surplus in precarious times is best placed in reserve -- it is the fiscally responsible thing to do.


 +   Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 22, 2012 at 11:01 am

To all the negative comment people: Please re-read the analysis.

Key quote: "The higher tax rate now also means substantial savings later -- in the neighborhood of $1 billion in financing costs -- because of a sharply shortened repayment period and a lower-cost type of bond."

This is the equivalent of doing a re-fi on your home, getting a lower rate and getting a 15-year loan instead of a 30-year loan. Lower interest rate combined with a faster pay-off. It will cost less money in the long run.

You pay a little more now, but in the end you will pay less overall when it comes time to retire the bond.

Pay me now or pay me much more later.

The 2011-12 surplus is operational and should go towards those types of items - salaries, maintenance, etc. Even if someone were able to move the surplus over to the building bond --- it is a drop in the bucket compared to the huge savings we'll see from changing to the higher tax rate and paying off the debt faster.

This is a no-brainer.


 +   Like this comment
Posted by JIm H.
a resident of Duveneck/St. Francis
on Jun 22, 2012 at 11:05 am

I'm a little confused as to how the rate can just be raised, without voter approval. Was that built in to the bond measure? If we voted the measure in assuming one rate, how can you go back and raise the amount we're paying? Isn't that a bait and switch?

Looks like all of the people voting for the increase are "financial professionals" so I'm thinking they can afford whatever increase there is. How about we have some "average citizens" on the panel.


 +   Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on Jun 22, 2012 at 11:09 am

The fact that the bond rate is being raised is totally predictable, based on the claims of the PAUSD's bond consultant (a unit of the Royal Bank of Canada), who claimed that the rise in housing prices for the PAUSD would increase at 7.5% a year for about 30 years, and then slack off to about 5.5% for the next ten years, or so. This projection was not cut from whole cloth, as there was ample data to justify the doubling of housing prices over the previous decades.

The data below is for 1994-2004 is real, taken from on-line sources, for home sales here in Palo Alto. The data from 2005-2025 is projected, based on the real data--

---------------------------------
Year| # |Ave. Price | %...|
------------------------------
2025|487|$5,672,042 |8.93%
2024|487|$5,207,052 |8.93%
2023|487|$4,780,182 |8.93%
2022|487|$4,388,306 |8.93%
2021|487|$4,028,556 |8.93%
2020|487|$3,698,298 |8.93%
2019|487|$3,395,114 |8.93%
2018|487|$3,116,785 |8.93%
2017|487|$2,861,274 |8.93%
2016|487|$2,626,709 |8.93%
2015|487|$2,411,373 |8.93%
2014|487|$2,213,691 |8.93%
2013|487|$2,032,214 |8.93%
2012|487|$1,865,615 |8.93%
2011|487|$1,712,673 |8.93%
2010|487|$1,572,269 |8.93%
2009|487|$1,443,376 |8.93%
2008|487|$1,325,049 |8.93%
2007|487|$1,216,423 |8.93%
2006|487|$1,116,701 |8.93%
2005|487|$1,025,155 |8.93%

2004|569|$941,113 |-7.65%
2003|507|$1,019,064 |20.69%
2002|401|$844,369 |-0.41%
2001|278|$847,827 |3.60%
2000|411|$818,331 |32.71%
1999|610|$616,625 |0.37%
1998|572|$614,370 |25.02%
1997|552|$491,401 |8.75%
1996|410|$451,861 |2.47%
1995|447|$440,954 |3.74%
1994|603|$425,064 |

As a reality check on the projected data, it seems that the median price of a home in Palo Alto has crossed the $2M mark recently:
Web Link

The problem with the RBC scenario is that everything has a natural cap, a limit to its intrinsic value, so that the future buyers of Palo Alto real estate were not likely to pay the overly-inflated prices that their predecessors did, since the price of many single family homes would double every ten years, putting the prices into the $3M-$6M range. It is very difficult to believe that anyone is going to pay $3M-$6M for an old Eichler in 2025, and beyond. But that's what the Royal Bank's people said, and the elected school board was "sold"—they endorsed the Royal Banks projections, and ignored the community that said" "No way!".

So .. here we are. The claim that the PAUSD could finance its bond debt on the backs of the old Measure B bonds, that will be retiring over the next decade has turned out to be false. Yet, no one on the school board seems to want to acknowledge the Board didn't do its homework, and that this failure sits squarely on its shoulders.

Given how poorly this school board has managed capital projects in the past, is it any wonder that they screwed this up too?

> "The higher tax rate now also means substantial savings later --
> in the neighborhood of $1 billion in financing costs

What? The latest Measure A bonds were only in the 375M range. Before the meltdown, when bond yields for this sorts of bonds were in the 4%-6% range, the financial costs would NEVER have been in the $1B range. Generally, for 30 year bonds, a simple rule of thumb is 2 dollars back for every dollar borrowed.


 +   Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 22, 2012 at 11:24 am

@ Jim H: Yes - the rate adjustment mechanism was part of the bond.

Here is the detail - from the 7th paragraph, 1st page:

"WHEREAS, based upon a projection of assessed property valuation and a proposed schedule of bond issuances, the Board has determined that, if approved by voters, the tax rate levied to meet the debt service requirements of the bonds proposed to be issued will not exceed the
statutory limit of $60 per year per $100,000 of assessed valuation of taxable property, pursuant to Education Code Section 15270;"

Essentially the committee recommended and the BoE approved increasing the tax up to the voter approved maximum of $60/$100K assessed value.


 +   Like this comment
Posted by cid young
a resident of another community
on Jun 22, 2012 at 11:30 am

Heloooo! They're spending OPM...

Other People's Money


 +   Like this comment
Posted by Garden Gnome
a resident of Crescent Park
on Jun 22, 2012 at 11:56 am

Um, "School-bond tax rate to rise 16 percent"

"The current tax rate of $44.50 per $100,000 of assessed property valuation under the 2008 "Strong Schools" facilities bonds will rise to $60 per $100,000 of assessed valuation."

If the rate goes from 44.5 to 60, that's an increase of 35 percent (ok, 34.83146...) not 16 percent, right?


 +   Like this comment
Posted by GougedInMidtown
a resident of Midtown
on Jun 22, 2012 at 12:38 pm

Mom and neighbor have it correct. Why spend a budget surplus on increases and then raise the taxes on local residents? Either the majority of residents are significantly more wealthy than I am or are not paying attention to the many different ways in which they are being repeatedly soaked.


 +   Like this comment
Posted by Jim H
a resident of Duveneck/St. Francis
on Jun 22, 2012 at 12:41 pm

Thanks CPD. If it was in the measure, hard to complain. At least we know that they can't raise it anymore.


 +   Like this comment
Posted by natalie
a resident of Midtown
on Jun 22, 2012 at 1:32 pm

I feel the same as Jim H. He wrote:

"Looks like all of the people voting for the increase are "financial professionals" so I'm thinking they can afford whatever increase there is. How about we have some "average citizens" on the panel."

Not all are financial professionals, butaccording to the article, most are and the others are probably well off financially.

As a fixed income senior, I find it hard to swallow any increases to my property tax, which I pay with savings. Luckily, I bought my house so long ago, that it's assessed value is limited by Prop 13. Otherwise, I probably could not afford to live here.


 +   Like this comment
Posted by Jim H.
a resident of Duveneck/St. Francis
on Jun 22, 2012 at 1:33 pm

One last question/point CPD. If it is such a "no-brainer" and will save nearly $1,000,000,000 then why didn't they start out with a $60/$100,000 tax rate? The shortened pay back period would have saved money back in 2008 just as it does now. So, why wait 4 years to increase the tax rate?

Dana Tom said, ""Given the huge change in the financial landscape since the (2008) bond election, the question is whether to bear a larger burden now from facilities we'll benefit from soon, or push off the payments 35 years,"

So, he's saying, let's spend money that we don't have now, because things will get even worse???? Essentially, the district is spending an increased amount of money now, which they claim not to have, during a fairly hearty recession, a time when most people/companies/cities are trying to find ways to put off expenses to a later date when the economy gets stronger.

Seems to me that the district messed up somewhere.


 +   Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 22, 2012 at 1:55 pm

I think Wayne Martin has part of the reasoning in his post above --- the assessed property values (and/or turnover of properties, which substantially increase) have not increased at the planned/anticipated rate. So the pay off rate wasn't going to work long term.

But I would also hazard to guess that the low interest rates available today were not available in 2008.

I'm not on the committee or the board. I'm not a "finance professional" nor do I play one on TV :-) Just an educated guess or two.


 +   Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 22, 2012 at 1:58 pm

Whoops, typo. S/B:

the assessed property values (and/or turnover of properties, which substantially increase property taxes on the multi-million $$$ price) have not increased at the planned/anticipated rate.


 +   Like this comment
Posted by Fact check
a resident of Barron Park
on Jun 22, 2012 at 2:12 pm

"The PAUSD teachers are paid more than other districts"

Actually, many local districts pay more than PAUSD.

Web Link

In 2011, Mountain View-Los Altos, Los Gatos-Saratoga, Woodside Elementary, and Hillsborough all had higher average salaries than PAUSD. The link above also shows superintendent salaries.

Web Link

This link gives more than just average salaries and also shows that Mountain View-Los Altos pays significantly more than PAUSD for both starting teachers and highest paid teachers.


 +   Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on Jun 22, 2012 at 2:31 pm

> "Looks like all of the people voting for the increase
> are "financial professionals"

No .. not all are. In fact, not all actually own property in Palo Alto, and/or have any "skin in the game"--meaning that at least one of these people lives in a tax exempt property here in town.

> At least we know that they can't raise it anymore.

Actually there is something to this. If you understand the fallacy in the RBC (Royal Bank) model--which requires the aggregate property value of the PAUSD (Palo Alto, Los Altos Hills and Stanford/Residential properties) to increase by 7.5% a year--and this doesn't happen, then the PAUSD will have to increase the bond rate yearly in order to retire the bonds. They have already raised it once, and will likely have to do so every year from now until the end of the 40-year pay-down period is over. That means that each year, they will have to admit to the public that they didn't know what they were talking about back at the time they were pushing the Measure A onto the ballot.

If the bond rate is pushed to the limit, then the bonds will be paid down sooner than 40 years, and the PAUSD will no longer have to discuss this matter in public. Within a couple of years, it will all be forgotten--except for a few of us who would like to believe in the integrity of government--but are always disappointed.

The key issue here is the "aggregate property assessment" of the PAUSD jurisdiction, which has doubled every ten years or so, for the last 30 years, or more. (I have met a number of senior citizens who moved in prior to 1950 who paid in the $10K-$12K range for their homes.) It really stretches the imagination that homes will continue to double every ten years in price. If there is ever a drop in property values, then this will create a real problem for the PAUSD, because it will have pushed the bond rate to the maximum. Of course, they could push another bond through that would be used to cover the unmet revenues of the Measure A bonds. But if that happened, there would have some sort of regional deflation of property also--which would make for a lot of unhappy people.

Oh .. and keep in mind that if the PAUSD wants to re-open Cubberley, we are probably talking about $300M-$500M (just an guess) to rebuilt the site to meet the higher-than-normal expectations of Palo Alto parents for school facilities. This Cubberley rebuild is not on the table at the moment, nor is the $500M to $2B that the City of Palo Alto wants to spend for its "infrastructure".

All-in-all, Palo Alto is becoming a very expensive place to live.


 +   Like this comment
Posted by Annoyed mom
a resident of Adobe-Meadows
on Jun 22, 2012 at 2:36 pm

I voted NO on the bonds (even though I have kids in the schools). However, who voted for this? All the seniors who vote yes ...

1) because real estate companies scare them into thinking thattheir house values will plummet if they don't (baloney), and then

2) turn around, claim an exemption for the bonds tax since they are seniors, and end up not paying a dime.

It's how it works, folks. In my book, it's called representation without taxation.


 +   Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on Jun 22, 2012 at 2:53 pm

> turn around, claim an exemption for the bonds tax since
> they are seniors, and end up not paying a dime.

Actually, it doesn't work that way. There is no senior exemption from base property taxes--unless you happen to live in places like Channing House, Lytton Garden, or Stephenson House, to name a few of the many tax exempt housing properties around town.

The problem turns out to be Prop.13. Anyone who has been living in Palo Alto in a home since before 1976, is likely paying $1,500 a year in property taxes, or less. (Homes could have been remodeled, so the 1976 initial assessment might have been updated to something closer to market values; however, without such remodels, the older folks are living in homes that were assessed in 1976.)

So, the bond consultants suggest to their clients that they target seniors--who don't pay a lot, and renters, who don't pay property taxes directly-- to vote YES on all bonds/parcel taxes because they won't be seeing the bill for the new taxes, like people who have recently moved in California.

In Palo Alto, these two groups make up perhaps 70% of the population, although it's not exactly clear that they march to the tune of the Vote YES consultants, and their local supporters of increase taxation and increased government spending. Many renters are not qualified to vote, or just don't.

Seniors are only exempt from parcel taxes, if they choose to request an exemption.


 +   Like this comment
Posted by Puzzled newcomer
a resident of Fairmeadow
on Jun 22, 2012 at 3:22 pm

Thank you for your explanation, Wayne Martin and other posters.
I often don't understand some changes in Palo Alto from PAOL articles.
I like PAOL for good & interesting postings.


 +   Like this comment
Posted by Annoyed mom
a resident of Adobe-Meadows
on Jun 22, 2012 at 4:28 pm

Thanks Wayne Martin. I knew seniors had an exemption. So, it's for the parcel tax instead of bonds... I still think it is not fair to be able to vote for a tax you don't have to pay.

Prop. 13 should be reformed but cautiously and starting with commercial properties. As someone who's owned a home in Palo Alto for 20 years, and lives modestly I'll add, I don't think we could stay here if all of a sudden our house was reassessed to its full value. Our property taxes would about triple and we could not afford that.


 +   Like this comment
Posted by Thank you Chris Kenrick
a resident of Ohlone School
on Jun 22, 2012 at 5:41 pm

Thank you Chris Kenrick for your added comments on this .... you have taken so much time to not only research the subject, to talk DIRECTLY to those involved, to FURTHER research and come to understand, and then you take the time to write up your extensive and long term (i.e. you have seen this city go through cycles and phases and stages) (and yet you are still young!!) knowledge for the benefit of the rest of us.

You are a much admired, much appreciated and much respected member of my Palo Alto community.... Thank you and keep it up!!

You are a fantastic journalist.


 +   Like this comment
Posted by TK
a resident of Barron Park
on Jun 22, 2012 at 6:08 pm

Well What happens when your child does not go to Gunn High this year and just graduated this year? I'm sooooooo sick of bonds! we have spent them all to the school's and the money does go to remodeling the school's! now next year I get to pay for for my parcel tax to go up again? Now that I have a Daughter that is no longer at Gunn Tx God!
My paying parcel tax which is a nice way of saying "BOND passed" is going up again! have parents that work in P.A BUT does not live in P.A! drop there child off to go to school in P.A. pay something!I'm sick of paying for non P.A resident's they are not stuck with the parcel tax! gee maybe because they don't live here! or maybe they don't like there neighborhood school's or maybe they are really glad they get a Free ride!and I bought my house 23 year's ago! I'm sick of it! no teacher at gunn will tell you the money goes to them! Can't wait to LEAVE! barron park now that will be sad! sick of paying for non-residents also!


 +   Like this comment
Posted by Nora Charles
a resident of Stanford
on Jun 22, 2012 at 6:51 pm

I especially love the quote from Camille Townsend "...saving this kind of money for taxpayers makes sense." Not to me. Where is Howard Jarvis when we need him?!


 +   Like this comment
Posted by Parent
a resident of Charleston Gardens
on Jun 23, 2012 at 7:42 am

Ok, so my property tax bill is going up by $500 or more this year? Because the irresponsible arrogant school district can't manage to STOP SPENDING MONEY?

Okay, well in the real world we have to cut to make ends meet, so ... Lets see how I'll manage to make ends meet on this.

$200 to PIE
$100 per year for two tickets to the high school Sports Boosters auction
$100 pe year for the elementary school auction
$50 spent at the harvest fair
$50 for beginning year supplies donations

So that's how I'll find $500 this year. And that's a PROMISE.

And if they think I'll EVER vote for another school bond, for ANY reason, they are so sadly mistaken, its not even funny. In fact, I'll make it my life's mission to make sure the next one gets defeated.


 +   Like this comment
Posted by Mom
a resident of Fairmeadow
on Jun 23, 2012 at 8:07 am

In REAL WORLD, say for renters, they pay discounted rent during major constructions of their rented house.

Use of school is almost like rental. We need to apply this concept to decide who to pay the price.

Last year, my Gunn student suffered construction dust and noise during classes every day. We needed to go to PAMF to treat. I am not sure if I could ask for compensation for this. I hope some parents form a class action or something.

Anyway, I don't understand why current residents need to pay more tax to save money for the future residents. We suffer and pay more so that future students can enjoy beautiful buildings and relatively less tax???

I thought we'd get some tax break due to annoying construction and a lot of delay.


 +   Like this comment
Posted by Fact check
a resident of Barron Park
on Jun 23, 2012 at 9:37 am

"Ok, so my property tax bill is going up by $500 or more this year?"

Only if your assessed value is over $3M. The increase is about $15 per $100K in assessed value.


 +   Like this comment
Posted by Puzzled newcomer
a resident of Fairmeadow
on Jun 23, 2012 at 11:15 am

Fact check,

If you say it's only "about $15 per $100K in assessed value", could you pay it for me?


 +   Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 23, 2012 at 12:08 pm

So if I'm getting this straight - the majority of the people complaining about this decision would rather keep the tax rate lower, but end up paying substantially more in total over time.

Do I have this correct?


 +   Like this comment
Posted by Actually...
a resident of Adobe-Meadows
on Jun 23, 2012 at 12:38 pm

CPD, I think, at least for some people, the idea is that they get the rate lower, then sell their house to the unwitting family, and have that family pay substantially more over time. If earlier residents had taken that view, we'd be paying now for buildings put up in the 1970's.


 +   Like this comment
Posted by John
a resident of Meadow Park
on Jun 24, 2012 at 12:38 pm

...in the wee hours. That's how they do it folks, in the dark of the night.

And you keep voting yourselves more taxes for the "schools". Actually bond, construction,finance companies and administrators et al see a cash cow and are sticking it to you.

You are still paying for a 1995 bond, its called dead money, paying off something that doesn't exixt. It's a con and we are the marks.F


 +   Like this comment
Posted by Jon
a resident of Another Palo Alto neighborhood
on Jun 25, 2012 at 2:16 am

I am happy to pay this extra cost now. In the same way that doing a refi makes sense so does this. If people are worried about over-spending they might want to focus on the city budget...


 +   Like this comment
Posted by Al Henning
a resident of Duveneck/St. Francis
on Jun 25, 2012 at 9:43 pm

At the former rate of $44, when would the bond indebtedness have been retired?

At the new rate of $60, when will the assumed-to-be-same indebtedness be retired?



 +   Like this comment
Posted by palo alto mom
a resident of Duveneck/St. Francis
on Jun 26, 2012 at 11:00 am

If the median assessed value of homes in Palo Alto is really only $850,000 - thats about 1/3 of the actual value of current home sales.

While we don't want to see people taxed out of their homes, a reasonable rise in property taxes compared to what currently occurs would be fair.


 +   Like this comment
Posted by Chris Kenrick, Palo Alto Weekly staff
a resident of Old Palo Alto
on Jun 27, 2012 at 10:40 am

Al Henning,

Indebtedness retires in 2056 under the former rate and in 2038 under the new rate, according to charts provided by school district consultant Tony Hsieh of Keygent Advisors.


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Posted by Resident
a resident of Another Palo Alto neighborhood
on Jun 27, 2012 at 4:30 pm

When are the developers of the new homes that are causing the increasing enrollment going to pay for a new school?

Why should those of us who have been living here for 10+ years be paying to increase the size of the schools for residents' kids who are living where office buildings used to stand?


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Posted by common sense
a resident of Midtown
on Jun 27, 2012 at 8:07 pm

Palo Alto Mom of Duveneck/St Francis, the median assessed value of homes at $850,000 is NOT 1/3 of the market value... That would make the median market value $2,650,000. There are alot of condominiums that have been built in the last 15 years which lowers the median price.

Resident of Another Palo Alto Neighborhood - our city council keeps granting PC zoning to developers, and keeps donating land and loaning money to Below Market Rate housing projects, all of which adds kids, and in the case of the Below Market Rate housing, don't pay any property taxes.

Lastly, PAUSD pays it's staff much better than other districts; for example, an elementary school principal in Cupertino has a salary range from $97,000 - $127,000, and will have a school with 600 - 750 kids. A Palo Alto Elementary School principal's salary range is from $107,000 - $144,000, and will a school with 400 - 550 kids. And Cupertino schools test scores are just as high or higher than Palo Alto schools.


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Posted by Wayne Martin
a resident of Fairmeadow
on Jun 28, 2012 at 11:02 am

> So if I'm getting this straight - the majority of the people
> complaining about this decision would rather keep the tax rate
> lower, but end up paying substantially more in total over time.

Without actually seeing the calculations, we don't know that we will be paying more. However, the Measure A bonds were supposed to retire in forty years. So, how many people paying today expect to be here in forty years?

What sense does it make to pay off the taxes of the people who will be living in the PAUSD jurisdiction forty years from now?


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