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School district preps for Draconian budget cuts

Original post made on Jan 14, 2009

Palo Alto schools may face Draconian budget cuts due to the state budget crisis, school board members were warned Tuesday night.

Read the full story here Web Link posted Wednesday, January 14, 2009, 9:51 AM

Comments (31)

Posted by Maya Shemtov and Shannee Braun, a resident of Community Center
on Jan 14, 2009 at 10:23 am

Palo Alto HIgh School is planning some renovations this year:

Web Link

Posted by Old school speller, a resident of Duveneck/St. Francis
on Jan 14, 2009 at 10:27 am

Please... could the editors kindly do their jobs? The possessive "its" does NOT have an apostrophe!

Posted by Old school speller, a resident of Duveneck/St. Francis
on Jan 14, 2009 at 10:28 am

Thank you! It was fixed...

Posted by Parent, a resident of Another Palo Alto neighborhood
on Jan 14, 2009 at 10:42 am

The school district was happily planning (blind to the econoimic crisis around them), capital improvements that require bond funding, which increases the districts debt service. Just like a mortgage. They got approval from the community to borrow money, (while increases their homeowners property tax bills - in what just might be the worst economic environment of a lifetime).

Their first fancy improvemnet plan with this money is to redo FIELDS at Paly.

Is this still prudent? Doesn't sound like it. The board needs to ask themselves if they are out there borrowing money left and right at this time, for their own personal finances, and if not, why not? Big borrowing for big spending doesn't seem like a very smart thing to do at this time. If they aren't doing at home, why are they doing it with our money for the district?

I'd like to know if any of the community supporters that pushed the bond in the last election are now willing to ask the district to delay in selling those bonds (and delay in spending that money), until the economic crisis is over. (in other words, until property values start to rebound, state of California resolves their budget crisis, and people start having jobs again).

Posted by just do it, a resident of Crescent Park
on Jan 14, 2009 at 10:57 am

We just need another revenue stream. The community will fund any deficit. It has said loud and clear that it wants strong schools and better libraries.

Palo Alto doesn't even make the top 10 list for spending on students and is only just above the national average: Web Link

We've got scope for increasing revenue without overspending wrt everyone else.

Posted by Resident, a resident of Another Palo Alto neighborhood
on Jan 14, 2009 at 10:57 am

This reporting sounds as if someone was at a small portion of the Board Meeting or that the budget was discussed in blinkered conditions.

What about the real budgetary concerns in an area where enrollment is escalating at the size of an elementary school every couple of years? What about the proposals for 2800 units being proposed at Fabian/Meadow? What about the new residents already moving into housing on Meadow, Hickeys, and the Jewish Campus housing? There are homes being built behind the old Su Hongs on Meadow. Even senior housing being built frees up housing for new families.

There was supposed to be discussion about using Garland when the lease runs out, I see no mention of that. We are probably going to have to open Greendell also. If you are only going to comment on money, then where is the money for these projects going to come from?

I feel that this is poor reporting from a reporter who does not know the real schools issue in Palo Alto. What has been written in this article tells us nothing.

Posted by John Markevitch, a resident of Greenmeadow
on Jan 14, 2009 at 12:17 pm

The Board did review and discuss plans on renovating Garland to prepare for the 2011-2012 school year (the district only gets the property back from Stratford in Nov. 2010) with sufficient capacity for 480 students. They also discussed plans to expand capacity at Ohlone to add slots for up to another 120 students. The money for each of these projects will come from Measure A funding, which can only be used for capital projects rather than operating expenses. The bonds were sold in August before the credit crisis expanded and have been earning interest for the district ever since. So far money has been spent on the Gunn aquatic center and are earmarked for Paly fields and the Gunn Industrial Arts building. Both high schools are in process of developing a comprehensive plan to guide future spending, as are the middle and elementary schools. District comments on the spending can be found at Web Link

Posted by Here we go again, a resident of Midtown
on Jan 14, 2009 at 12:25 pm

I've lived in Palo Alto for close to 20 years, and guess what. For close to 20 years, year in year out, I've heard dire warnings of impending financial catastrophe for the school district. In some years, it was cries that property tax income was collapsing. In other years, it was big speeches on the need to tremendously increase teacher salaries and benefits and other various perks and frilly items for various elements of the school system.

Enough already. Twenty years of crying wolf is enough.

Posted by Peter, a resident of another community
on Jan 14, 2009 at 1:15 pm

The larger question is the crazy quilt method of education financing, not only in California but throughout the nation. If we don't educate our children and don't offer educational and training opportunities for adults, the economies of California and the nation will suffer significantly in the future. Our democracy will suffer as a result of an ill-educated electorate.

As for California, I find it disheartening that, at $7,571 per pupil, we rank 47th in per-pupil spending by the states. Tiny Vermont ranks first with an average of $15,139; the national average is $9,963.

And now the governor is proposing to withhold billions of dollars in guaranteed funds from the schools atop already severe cuts.

Posted by Parent, a resident of Another Palo Alto neighborhood
on Jan 14, 2009 at 1:29 pm

Unbelievable some of the absolutely reckless and selfish responses here. HWGA - In the past 20 years have you ever seen an economic crisis like this one? I'll answer that for you, you have not. The declines in growth and the jobless rate are at levels not seen since the Depression.

I LOVE just do it's answer.. JUST SPEND THE MONEY. REVENUE STREAMS ARE UNLIMITED. (ie: JUST TAX US ALL MORE) just do it - this is so blantently ignorant, it has got to be facetious. Is it?

BTW, a borrower doesn't EARN INTEREST on a loan. The LENDER earns interest on a loan. The school district is the BORROWER when they sell bonds, so they are not earning interest on the bonds. They OWE interest on the loan. Do YOU earn interest on your mortgage? No, your lender does. The public who buys bonds is the lender when school district sells bonds.

The impact to the districts operating expense when they take out a loan is the interest payment they must make on that loan. Wow, I'd hate to be balancing YOUR checkbook.

Now, are they earning interest????
They might have sold the bonds and put the loan proceeds in a savings account - earning how much interest??? More than the interest they are paying to their lenders? Not possible - or else those lenders (sophisticated market investors), would have put their money in the higher earning savings account as well. Its the way of the market - PAUSD bonds are more risky than a savings account, they are going to pay higher interest than safer savings accounts.

Which means as a borrower, PAUSD is going to be PAYING more interest than they earn on the proceeds. And eventually they use up those proceeds anyway, and then ONLY pay interest, and earn no interest income from proceeds sitting in a bank, to offset that.

Now if they put the money in an investment more complicated than a savings account - then is that principle even still there any more? There HAS been a meltdown of the financial markets since August, and a precipitous loss of value in most investments. Or maybe you haven't been watching the news?

btw, here we go again: Go take a look at your 401K balance, how's it looking? Or are you one of the 'smart' ones who just had your money stuffed under your mattress? Maybe PAUSD stuffed their balance under the mattress in the nurses office at 25 Churchill?

Just do it - what's the new revenue stream you're thinking PAUSD needs? In your mind, where does that come from, exactly?

Posted by just do it, a resident of Crescent Park
on Jan 14, 2009 at 2:53 pm

Parent, Measure A garnered 77% of the vote. Measure N was nearly 70%. Those are huge majorities - specially when you consider the economic climate when Measure N passed.
Most people in Palo Alto value education over small tax increases.
Palo Alto's per student spending is 2/3 that of Vermont, there is huge scope for increase here.

Posted by Neal, a resident of Community Center
on Jan 14, 2009 at 4:53 pm

Hello to just do it and others. Has it ever occured to you that maybe the people who voted against measure A and measure N really can't afford another tax increase? Not everyone has deep pockets. Sadly, creating a financial hardship to support your pet pojects is of little concern to you. For forty years I've heard the school district whine about not having enough money. No matter how well they're funded they cry for more, more, more.

Posted by Newcomer, a resident of Barron Park
on Jan 14, 2009 at 5:06 pm


How can you even talk about financial hardship if you have lived in Palo Alto for forty years? You are paying almost nothing in property taxes for the great schools and the new library improvements while we newcomers carry your cost on our shoulders. Further, thanks to the great schools and libraries, your house is now worth fifty or sixty times what you paid for it! Prop 13 covers you from the cost. Your attitude is shameful.

Thankfully you are in the small minority of city residents. Most are forward thinking.

Posted by just do it, a resident of Crescent Park
on Jan 14, 2009 at 5:25 pm

Neal, 20% of folks will vote against a bond/parcel tax no matter what. So we're talking about, what, 3% of people in Palo Alto that couldn't afford Measure A changes. You're seriously proposing that we let 3% of the district dictate the district's direction?
As noted, since you've been here 40 years, you are probably a senior so can get an exemption and/or have such as low property tax base so as not to matter.

Posted by Here we go again, a resident of Midtown
on Jan 14, 2009 at 7:43 pm

Newcomer, just do it, and others...

Those of us who have lived here a long time don't have the income you have and can't afford extra taxes no matter our tax base. What are we supposed to do? Sell our houses and leave? You are going after the wrong people regarding prop. 13. The ones you ought to go after are commercial property owners.

I've been here 19+ years and I have paid 2 bond issues and 2 parcel taxes just for the schools. Additionally, I have been, with others, bombarded with requests and demands for donations to the schools right and left. Now I have children in college and have had to take on tens of thousands of dollars of new debt to pay for a UC system education for my kids.

You can call me selfish all you want. If being at the end of our financial rope is being selfish, so be it.

Posted by yuul, a resident of Duveneck/St. Francis
on Jan 14, 2009 at 8:44 pm

"If being at the end of our financial rope is being selfish, so be it."

You're living beyond your means and on the backs of others. If you've owned for 19 years, you are not paying your fair share of taxes thanks to prop. 13.

Posted by common sense, a resident of Midtown
on Jan 14, 2009 at 9:48 pm

To all of you complaining about prop 13 - consider this: there are kids in the Tinsley program (around 500 kids) who don't even reside in the PAUSD district, and not paying taxes. Is that FAIR?

There are also hundreds of kids who live in BMR rental units - these rental units pay NO PROPERTY TAXES at all. Is that FAIR?

The council recently approved a 50 unit low income development on Alma, near downtown for families. Another development which doesn't pay property taxes.

The current PAUSD budget is around $12,000/student. Most California school districts average $7,000/student.

The issue isn't prop 13 - it's all the additional students the PAUSD district is supporting which DON'T pay any property taxes.

Posted by More Common Sense, a resident of Another Palo Alto neighborhood
on Jan 15, 2009 at 5:14 am

Common Sense

I'm not sure where you got your nonresident numbers from, but looks as if they constitute about 5% of the PAUSD student body. Even without those children enrolled, bonds and parcel taxes still would be needed.

Tinsley -- The program was brought to us and neighboring school districts by a court order 20 years ago. The state pays PAUSD thousands of dollars per student each year to educate these children, which helps offset the cost alot.

Low-income units -- Take that up with City Council which, I suspect, does not consult with the school district or perhaps even consider it before making those decisions.

PAUSD $12,000/student spending -- You can only compare PAUSD's $s to the State's average if you are content with CA sharing the limelight with 3 other states as the worst funded schools in the US (a whopping $2.4k behind the national average), earning California funding an embarassing F in a recent national education survey. Even Mississippi funds its schools better than CA does.

Comparing Palo Alto's tax load to what other well-educated US communities pay for a good public education makes PAUSD a bargain.

Prop 13 -- Shortly before Prop 13 was passed, California was among the top 10 states in per pupil school spending and considered to have had the best schools in the nation. 30 years after Prop 13 CA schools, in the bottom 4 for funding, gets an F. Prop 13 is THE issue.

Posted by jsut do it, a resident of Crescent Park
on Jan 15, 2009 at 8:13 am

I'm not complaining about prop.13. If you can take advantage of any tax breaks, go for it! You just don't have a leg to stand on if you then complain about "high taxes" when you're paying next to nothing.
If you still can't afford these bond even with these tax breaks then, yes, it is time for you to move. Just as anyone who's moved here recently suddenly finds they can't pay afford the 22K+ a year they are paying on their property tax will have to move when they switch to a fixed income.
Just face it, you're in a high cost neighborhood and most of us don't mind dropping a "latte a week" for stronger schools.

Posted by Neal, a resident of Community Center
on Jan 15, 2009 at 11:00 am

It's amazing how people read anything they want into these postings. I've been a resident of Palo Alto for forty years but I have only been a home owner for 19 years. My income is way below Palo Alto's median and I'm not a senior citizen and therefore can't qualify for any tax exemptions. I want to apologize to Newcomer and all Palo Altans for for my dreadfully shameful attitude and my substandard income. I also want to whole heartedly thank Newcomer and all the others who have carried my costs on your shoulders. I am truly greatful.

Posted by wondering, a resident of Downtown North
on Jan 15, 2009 at 11:47 am

"The current PAUSD budget is around $12,000/student. Most California school districts average $7,000/student"

does anyone know how much the Immersion programs average per student?

Posted by Probably less, a resident of Duveneck/St. Francis
on Jan 15, 2009 at 2:16 pm

"does anyone know how much the Immersion programs average per student?"

Exactly the same, down to the penny. Unless they cost less.

Posted by common sense, a resident of Midtown
on Jan 15, 2009 at 2:19 pm

Tinsley alone is 5%. Throw in BMR and others, and you can be talking 800 - 1000 kids. This could equal around $8 - $12 million in budget.

Reallocate that back among the remaining students and the funding per student would be around $13,000 - putting PAUSD among the upper tier of "public" funded schools.

So there is money, it's just what it's being spent on.

It's mostly the same residents who vote for the City Council and who are in the school district, so if the voters are concerned about the schools, then they should make it a litmus test for who they vote for in this coming city council election.

Posted by common sense, a resident of Midtown
on Jan 15, 2009 at 6:56 pm

By the way, Businessweek has a list of the best High Schools, and
Palo Alto High is "Most Improved" in California:

Web Link

Posted by Budget Reader, a resident of Barron Park
on Jan 15, 2009 at 9:26 pm

"Tinsley alone is 5%. Throw in BMR and others, and you can be talking 800 - 1000 kids. This could equal around $8 - $12 million in budget."

It doesn't quite work that way. According to the district budget (available on its website), PAUSD received 70% of the sending district revenue limit for each VTP student. The budget didn't specify the amount for the other interdistrict transfers, but I would assume it would be similar.

The actual number of non-district students in 2006-2007 were:
VTP - 537
Children of district employees - 118
Other - 21
For a total of 676 out of a total enrollment of 11,172 (in 2006-2007)

If I understand the details correctly, the revenue limit was approximately $8500 per student. So in the worst case scenario, the non-resident population "cost" the district about $4.5 million (Spending per student minus 70% of $8.5K multiplied by 676). But that's assuming that all district expenses would decline linearly with lower enrollment. Obviously, this is not true since some costs are fixed.

Interestingly, resident student increases actually cost the district more than the VTP students since they don't receive any state aid for them.

Posted by common sense, a resident of Midtown
on Jan 15, 2009 at 10:12 pm

Budget Reader,

I looked at the budget book of the PAUSD Web Link

The money received from the state on page 25 titled "REVENUE LIMIT" is $1,942,014. According to page 21, this is for the "VTP, summer school, and supplementry hours program". Allocating this entirely to the VTP population of 572, means $3,395 per student, NOT the $8,500 in your post.

Your calculation also doesn't include the students who occupy BMR rental units, which don't pay any taxes at all.

What I am bringing up is the "fairness" issue, that some use to argue against Prop 13. Here are some other "fairness" issues that some of the posters should think about:

- Is it fair that some houses have 3 or 4 kids in school and their tax burden may be less than houses that have 1 kid? Based on the anti-Prop 13 posters, aren't these households getting a free ride?

- Is it fair that businesses pay property taxes, but they can't send their kids to Palo Alto schools? Are these posters getting a free ride?

- In the same year, one family buys a $3 million house, another family buys a $700,000 condo; both send kids to school, yet each family's property tax burden is different - how is this any less fair than someone who bought 10 years earlier for a lesser price?

Posted by Katie Christman, a resident of Professorville
on Jan 15, 2009 at 10:29 pm

Well, here we go again.

Dear "common sense",

Are you sure you want to chase all the 'poor' people out of our Palo Alto Schools? Are you sure they don't actually add to our district? Is money they only measure of worth?

Palo Alto may not have the BEST schools in the country at this point, but then again those measurements do not take into account the number of students who come here not only speaking another language, but as the only student in a class who speaks that language. It is one thing to speak only Spanish or Chinese or Japanese or Hebrew; we do have a fair amount of support and ethnic community for speakers of those languages. How about if you speak only Finnish, or Russian, or Dutch, Swedish, or Bosnian? How about if you are from Kenya or Tunisia? We have Stanford brining in folks from all over the world, and if they don't raise our test scores they certainly enrich our lives.

I do identify with the older homeowners because they have fixed or declining incomes and often houses that are very hard to keep up (even the little ones). And I truly feel that adding so much new housing without waiting to feel the effects of the other recent batches is a BIG mistake. But I also grew up 'poor' in Palo Alto, we never owned property here, and I knew kids from EPA and low income housing and still know folks that Tinsley in or live in low-income housing, and they very often CONTRIBUTE GREATLY to our community.
Being friends with kids of different backgrounds and economic levels is a boon to anyone growing up, it gives you perspective. It is too easy to lose your sense of perspective if you are brought up with only people of your own ethnicity, socioeconomic background, color, race, whatever. We need the diversity in this town, and we benefit from it, at what cost? At 1,000 students at 12,000 dollars per for out of district kids, that is not much per year to mix things up a little! I don't know the numbers on low-income housing kids, and I do think that is happening a bit too fast at this point, but I know that all different abilities and talents and problems and stresses exist at all different economic levels, and finding that out is part of growing up. If we are too insular, we lose.
Besides, SOME people are wealthy and own their houses outright, and some have two incomes, but some just scrape by to afford living here; not all Palo Altans are wealthy or even solvant! Also, multi-generational families are more common than you might imagine. And what about all those duplexes and apartments along Alma? There is some real dedication there from people who know a good town when they see one and are willing to take a smaller, less impressive living situation in order to enjoy it, and it this town is not just good for the rich, unlike some. We have sidewalks and bike lanes and good public schools, parks, businesses that have been in town forever (there are still quite a few out there)! Let's not forget our Librarians (ok, some of the Libraries could use some work but the Librarians are fabulous), and the Theatres.

If your kid goes to horse camp he may be riding with someone who gets a huge subsidy from the city for the camp or someone who lives in a mansion. This is critical; we don't want to live in suburbia! I know lots people who live and work in Palo Alto without making a fortune or even owning a house. We need places for our teachers and firemen to live, if not the butcher and the baker.

I think more sources of revenue are possible. The schools for one have revamped their fund-raising to be more fair, and it has done very well. I think we don't always prioritize our spending well. But you can believe each dollar is agonized and argued over!

So I guess I am back to my same old boring line, which is, let's think of more creative solutions for taking care of our fair city and her institutions, and not start blindly hacking at her limbs and organs.
We need to think ahead a bit more to avoid panicked 'ballast-dumping' moves that end up costing a lot more than dollars. And we need to work together, even those of us who can't always agree, to preserve the things that are working.

Sincerely and in great affection for all who live in our town (and so many who don't!),

Posted by common sense, a resident of Midtown
on Jan 15, 2009 at 11:03 pm


I agree alot with what you've posted; my main point to the "Prop 13 isn't fair" crowd is that the property taxes that one pays has very little to do with the excellent education being provided by the PAUSD. Property taxes happens to be a much more stable funding source than sales taxes or income taxes or depending on state funding. In Palo Alto, we are fortunate enough to be able to fund much of our excellent local school system ourselves, yet still get alot of the benefits from the Prop 13 of protecting people from being "taxed" out of their homes. Many other districts in California are facing very difficult decisions due to California's state deficit problem.

I don't covet anyone else's money or property, and I wish the "anti-Prop 13" posters would have the same philosophy.

Posted by Budget Reader, a resident of Barron Park
on Jan 16, 2009 at 8:49 am

Common Sense,
I used the $8500 value as the total revenue limit of the Sequoia Unified High School District and our receipt would be 70% of that (about $6K). The VTP population was 537, not 572, but you're right in that it's still less than $6K. What that means is that the revenue limit for elementary and middle schoolers are lower than for high school students. As an aside, wow, the revenue limit calculation is a mess (try figuring it out from the CDE website. I ended up finding a news article that gave the number for SUHSD).

I don't quite understand your argument against BMR residents. If they are a resident in Palo Alto, they are entitled to attend PAUSD and PAUSD has no say in it. This seems like more of a complaint to the City Council than to PAUSD. Remember, the City of Palo Alto and PAUSD are two distinct entities.

Posted by Resident, a resident of Another Palo Alto neighborhood
on Jan 16, 2009 at 9:11 am

I think that the real problem here is stated as a by the way in Budget Reader's comment. The City of Palo Alto and PAUSD are two completely different entities and the City does not appear to acknowledge that any decisions they make will affect PAUSD which has no say in the matter. I have never heard any City type discussions on what impact their decisions will make on the schools. They say, "Oh the schools get impact fees every time there is construction, whether by new housing or home improvements, so that will be fine". The problem is that these school impact fees are not the answer to overcrowded schools. Yes the impact fees can go towards providing portable classrooms or teachers, but they can't magically provide a campus for a new middle school, or add acreage to an existing high school or elementary school, or even reduce the odds for a student to get the leading role in the school play or becoming prom queen.

Our schools are losing their small town charm because they are getting so big. Many of us moving here many years ago looked at the size of schools as being a plus, after all who wants to go to a high school of over 3000 students even though there are many of them about. As it is, we can go to a parents evening at a middle or high school and not even recognise another parent we know, this is not what small town community feels like.

PAUSD suffers because the City makes decisions which affect them and they have no say in the matter. The City plans 2800 homes on the Palo Verde/Fairmeadow boundary and "expects" the schools to take on new students. Does anyone in the City actually look at the numbers of students already in these schools and the numbers of students being overflowed out of these schools across town? Does the City look into the fact that many students living in these proposed units will have to be driven across town to get to school when there is no public transport or school buses? The answers to both these questions is probably "no". Instead, they will look on the impact fees as being a reasonable answer to these questions.

My answer to that is "Huh".

Posted by common sense, a resident of Midtown
on Jan 16, 2009 at 10:58 am

Budget Reader,

My arguement isn't against BMR, but against the arguement that "long time property owners aren't paying their fair share because of Prop 13".

If you have one kid in the PAUSD, your house would need to assessed at $2.5 million to "pay your fair share". Two kids would mean an assessment of $5 million. I doubt many of those complaining about Prop 13 are paying enough in property taxes to cover their kids cost in the PAUSD. The subtext is they want other people to pay for it.

Prop 13 is irrelevant to their arguements; for example in the same year, one family could have 2 kids going to school and buy a $700,000 condo, and another family could buy a $3 million house, send 2 kids to the same schools but pay 4 times as much. Businesses are paying property taxes, but they don't get to send their kids to PAUSD schools. So the "Prop 13 is bad" arguement is totally false.

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