Guest Opinion: Passing our school and community legacy to future generations Guest Opinion: Passing our school and community legacy to future generations (October 20, 2004)

by Stephen Levy

I write in support of local Measure I on the Nov. 2 ballot -- to continue and increase the parcel tax for education in Palo Alto.

My work involves studying the state and regional economy, and in recent years has focused on explaining the connections between public policy and the economy.

Yet today I write primarily as a parent whose children have been educated in Palo Alto's public schools. My wife, Nancy, and I are deeply grateful for the special care that our children received by numerous teachers and staff. Passing the parcel tax can help pass on the legacy of great and caring schools in Palo Alto to future generations.

Palo Alto public schools are financed differently from most public schools in California. Nearly all other school districts get the majority of their funding from the state. Nearly all other school districts get additional money for every additional student. Palo Alto schools face a different situation.

Palo Alto schools get more than 70 percent of their funding from local property taxes. Additional money comes from the federal government and the state, but nearly all federal and state money is mandated for specific program areas. So virtually all of our discretionary money comes basically from property taxes.

When enrollment increases in Palo Alto, as it has in recent years, our schools get only a tiny amount of additional state funds. In essence, our property-tax dollars must be stretched to cover the costs of educating additional students.

The major issue raised in the current parcel-tax debate is how much additional property-tax revenue will be available from new construction projects in Palo Alto. In essence, the opponents of Proposition I are asking, "Don't we have enough money already?"

Property-tax revenues rise in Palo Alto from two main sources: (1) the sale of houses after which property values are reassessed to full market value, and (2) new developments such as hotels, shopping centers or housing.

Schools do not benefit from the rise in housing prices because the assessed value of existing homes cannot rise by more than 2 percent per year since 1978 under Proposition 13.

Without stable state funding, Palo Alto schools face the uncertainty of whether enough families will sell their houses each year or whether and when new projects might be built in a city which is essentially all built out. When everything goes well, the schools might get enough new revenue to keep pace with rising enrollment and costs. If housing sales stall or the economy tanks, property-tax revenue growth becomes uncertain.

The opponents of Measure I have made an implicit pledge to support all new developments in Palo Alto. Otherwise their statements that we will have enough revenue is just hot air.

And do we want parents and teachers supporting each new major development proposal because that is the only way they can get more money for our schools? The parcel tax reduces some of our vulnerability to economic uncertainty.

But, even if I were certain that property-tax revenues would continue to grow, I would still support Measure I. I want to do better than just maintain the status quo.

The "existing situation" has led to a steady loss of programs and the extras that have made Palo Alto schools great. There are programs and resources that were available to our children that have been lost or are threatened.

Meanwhile, global economic competition has raised the bar for what we need to achieve in K-12 education. "Making do" is not good enough.

My family was given a legacy by prior generations and I want to do my part to pass that legacy on.

By helping schools, we help maintain the value of Palo Alto homes, which are priced with a premium compared to neighboring communities. A large part of the reason for this price premium is the excellence of our schools. If our schools lose their edge, you will see an erosion of the premium placed on homes in Palo Alto.

But I prefer to think that most families do not need the financial incentive. They know that our schools are a treasure to be passed from generation to generation, sustained and enhanced by each new group of families, children and teachers.
Stephen Levy is director of the Palo Alto-based Center for Continuing Study of the California Economy and is a Palo Alto resident. He can be e-mailed at slevy@ccsce.com.

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