Schools loosen purse strings after property-tax revenue jumps

Years of belt-tightening give way to added staff, raises for teachers

Palo Alto school officials are loosening the purse strings for the first time in years as a booming real-estate market has boosted property-tax revenues more than 6 percent yearly for two years running.

Without a pay raise since 2008 -- except for the automatic, seniority-based "step and column" increases in the union contract -- teachers are likely to get two salary hikes this year totaling 7 percent, plus bonuses.

The first, a 3 percent raise plus 1.5 percent bonus, was awarded in May, retroactive to fall 2012. The second -- to be voted on next month -- gives teachers, staff and administrators an additional 4 percent raise for 2013-14, plus a 2 percent bonus.

In addition, the Board of Education last week approved $1.9 million in new spending under the district's $180 million operating budget, mostly for the hiring of new teachers and technology support.

That comes atop a $2.6 million package of additional spending approved in April, which has gone primarily to boost principals' discretionary funds and add teachers. The district also has set aside $5 million to be spent over three years on professional development for teachers and staff.

The prospective 4-percent raises will cost an ongoing $5 million, according to Cathy Mak, the district's chief budget official.

The raises apply to all teachers, staff and administrators except for Superintendent Kevin Skelly. The board did not propose a raise for Skelly this year but did propose a 3 percent, one-time bonus on his regular pay of $287,163.

The raises, scheduled for a Dec. 10 vote, would bring the salary of an entry-level teacher from $52,965 to $55,083, plus a one-time bonus of $1,059. A mid-career teacher would go from $85,924 to $89,360, plus a one-time bonus of $1,718. The most senior teachers on Palo Alto's salary schedule now earn $106,951, and an additional 4 percent would bring them to $111,229, plus a onetime bonus of $2,139.

In addition to good news on property taxes -- which comprise 72 percent of school district revenue -- the school district will gain $2.4 million annually for the next six years due to last November's passage of Gov. Jerry Brown's Proposition 30, which boosted state sales tax by 0.25 percent for four years and increased personal income tax of Californians with incomes of more than $250,000 for seven years.

On the other hand, Brown's new Local Control Funding Formula, which shifts state resources toward low-income schools, means an ongoing annual loss of $7.5 million to the Palo Alto district.

State funds now account for only 11 percent of revenue to the school district -- slightly lower than the share provided by an annual $613-per-parcel tax on residential and commercial property, renewed for six years by voters in 2010.

As a so-called "basic aid" district funded primarily from local resources, Palo Alto does not get revenue on a "per-pupil" basis as most other districts do. Thus, officials are constantly on edge that enrollment growth will outpace revenue growth and cause a drop in per-pupil spending.

However, this has not happened in the past decade except for the years 2010-11 and 2011-12.

"We had some bad years on property taxes and now we have a good one this year, but we don't know how long that cycle will be either," board member Melissa Baten Caswell said at the Nov. 19 meeting.

"We just have to be prudent as we go forward and keep checking and verifying along the way. It would be awful to put things in place and have to pull them out again, so I want to make sure we're making good decisions on additional investment."

Palo Alto remains far better off than the vast majority of California's 1,000 school districts. Per-pupil spending here is between $13,000 and $14,000, compared to a statewide average in recent years hovering around $8,600.

According to a 2012 analysis by the National Journal, California is among the 10 lowest-spending states on a per-pupil basis. Higher-spending states include Vermont ($17,847); New Jersey ($15,116); Connecticut ($13,959); New Hampshire ($13,519) and Massachusetts ($13,361).

We can't do it without you.
Support local journalism.


Like this comment
Posted by Parent
a resident of Charleston Gardens
on Nov 30, 2013 at 7:37 pm

How nice for the school district which apparently has plenty of money, including my extra property tax assessment. MY purse strings can not be loosened, but the school district who has spent lavishly throughout the downturn now is has a windfall. Wonder if anyone over there will do the right thing and payoff the bond early, and let us off property owners the hook. I doubt it, because no one apparently over there has a conscience.

The only comfort I have is in knowing I don't give an extra dime to the school district - PIE - or otherwise. They're taking blood from my stone, with no signs of letting up, their extreme makeover is what they decided they needed my discretionary $s to go to - hope they're enjoying it - that's ALL they're getting from me.

Like this comment
Posted by Fred
a resident of Barron Park
on Nov 30, 2013 at 8:09 pm

@Parent - the people who authorized the spending on the bond building program are not the school administrators or even the board - it was the >77% of your voting neighbors who passed the 2008 bond. So while you may not agree, which is fine, the board and staff are following through on the plan and spending that the voters approved.

1 person likes this
Posted by PA Parent
a resident of Midtown
on Nov 30, 2013 at 8:11 pm

I would love to see PAUSD hire more support staff and take the burden off of parents who currently provide yard duty, help keep the library open at lunchtime, serve as teacher's helpers with math tables, hand writing tables, assist with ALL school functions, organize and staff major fundraising events and so much more.

Like this comment
Posted by Paly Parent
a resident of Palo Alto High School
on Nov 30, 2013 at 10:22 pm

It is about time that parents stopped being guilt tripped into contributing to PIE.

It is also time to stop guilt tripping Palo Alto voters into voting for bonds for libraries, bonds or anything else that we are told is "for the children". Too many people have voted yes and now regret it as the true facts come out.

Like this comment
Posted by Fred
a resident of Barron Park
on Nov 30, 2013 at 11:37 pm

@Paly Parent - what are the "true facts"?

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 1, 2013 at 6:30 am

@ OP/Parent. FYI - the board did vote to pay off the bond at an accelerated rate....about two years ago.

Like this comment
Posted by Con Brio
a resident of Jordan Middle School
on Dec 1, 2013 at 12:09 pm

It's about time that PAUSD stop sending begging letters twice a year, pleading for unrealistically large " donations" per child in the district.

It is also high time they stopped charging for summer school. They are turning public education into private education.

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 1, 2013 at 6:13 pm

It has already been announced that PAUSD will not charge for 2014 summer school...however, since there will not be any tuition to offset the costs, only remedial and "make up" courses will be offered; no "enrichment classes or "get ahead classes". if your student wants to get a leg up and get in a full course (e.g., Spanish 2), you will have to go to and paynformthose courses at places like St. Francis or Lydian.

Like this comment
Posted by Paly Dad
a resident of Palo Alto High School
on Dec 1, 2013 at 6:35 pm

I have no problem with contributing through donations or taxes. What I object to is the incompetence of Kevin Skelly and his management team, including especially Katherine Baker the former Terman principal who was promoted after the OCR found that the school under her leadership violated the civil rights of a disabled student by allowing her to be bullied extensively. Because of this incompetent leadership we now have legal fees, five different ongoing state and federal investigations, and private lawsuits filed with more coming.

I don't begrudge teachers a living wage. I begrudge wasting my hard-earned money on preventable litigation. Katherine Baker should have been dismissed not promoted. Is there no accountability? Why is Charles Young still drawing a PAUSD paycheck after he fouled up the Paly "rape culture" Title IX scenario, the Terman bullying, the Duveneck bullying, and the Jordan CFS case? [Portion removed.]

Like this comment
Posted by Ruined brand
a resident of Another Palo Alto neighborhood
on Dec 1, 2013 at 8:23 pm

PAUSD is rolling in the money and everyone, except students, are getting their share. The board will be voting 5-0 on December 10 to give Kevin Skelly another $10,000 bonus just for the heck of it and there is not a damn thing anyone can do about it. Except never donate to PiE or vote for another parcel tax again.

Like this comment
Posted by PalyDad
a resident of Palo Alto High School
on Dec 1, 2013 at 10:09 pm

Please do not give Kevin Skelly a bonus. Why would he get a bonus? I would like to drag my employer into five separate federal and state investigations and then show up with my hand out for a bonus check. This is like an Onion story. Superintendent draws federal investigators, allows bullying of handicapped, state investigates special ed noncompliance, parents complain in droves, boy accused of having contagious disease but doesn't sues for discrimination, Super fails to do a damn thing about RAPE CULTURE at high school, Super hides fact of findings against district from board, super enters agreement with feds he then fails to complete on a timely basis, what in God's name has to happen? [Portion removed.]

Like this comment
Posted by Jo Ann
a resident of Embarcadero Oaks/Leland
on Dec 2, 2013 at 1:01 pm

How about using the increased property tax revenues to fund the infrastructure repairs rather than asking us for ANOTHER tax increase???

Like this comment
Posted by Alveolar Ridge
a resident of Midtown
on Dec 2, 2013 at 3:15 pm

It seems as though too much of this excess money is being blindly handed to Kevin Skelly. After the mess he has made of our district and the PAUSD, he should be dismissed, NOT given two raises, one right after the other! He has cost the district a bundle, and potentially a bundle more if the district loses the lawsuits filed ( due to Kevin Skelly).

Obviously, the BOE thinks we have so much money we can just start lighting matches to thousand-dollar bills.

Like this comment
Posted by Parent
a resident of Charleston Gardens
on Dec 2, 2013 at 7:30 pm

Fred, First of all, the school board is the one who put the bond on the ballot. So it was the SCHOOL BOARD and no one else asking for the funding. They got what they asked for and they get zero more from me.

AND, the school district has gotten very clever about making sure their bond measures get on to off cycle elections, with very strong marketing in the school community - ensuring that 77% 'of my neighbords' means no such thing. It means 77% of the school community that bothered to show up for the vote - where the bond measure was the only thing of any consequence on the ballot. THAT practice should be made illegal immediately. Maybe the community grass roots organization that got the petition put forth for Maybel can advise on how a community might organize to make sure that the school district is required to put their bond measure on on-cycle ballot's only.

Crescent Park Dad - so when does that mean the bond will be paid off, and does that mean we stop paying it on our tax bill early? When? Or where can we find this out?

Like this comment
Posted by Parent
a resident of Charleston Gardens
on Dec 2, 2013 at 8:26 pm

Crescent Park Dad - by the way, they voted to accelerate the repayment by INCREASING the RATE of property tax on the bond. Not by pulling back on their lavish spending, not by finding a way to contribute windfall funding to the repayment, by by taking more each month out of our paychecks. Very big of them.

Like this comment
Posted by Fred
a resident of Barron Park
on Dec 2, 2013 at 9:05 pm

@Parent - I don't fault the Board for asking for money to pursue their mission; that's kind of their job. Given the growing school population and the age/condition of some of the facilities, it seems appropriate. And 77% in any year is a landslide to me.

Lavish spending - what parts do you feel are lavish?

As for using an operating surplus to pay down the bond - I'm not sure that is permitted. The opposite, using bond money to pay operating costs, certainly is not. More importantly, I don't think that many would support diverting money from classrooms to pay off the bond in, say, 20 years instead of 25.

Like this comment
Posted by Sara
a resident of Old Palo Alto
on Dec 2, 2013 at 9:11 pm

So why are the classroom sizes so big for elementary??
….and why is the music program in elementary so dismal compared to 15 years ago
….and why do parents have to volunteer 24/7 in the classrooms
….and why is there no second language instruction
….and why is there no school nurse
….and why is PE only twice a week
….and why aren't there more aids in the classrooms
….and why are there no professional yard duty
….and why are the lunches so disgusting
….and why ….and why …. and why are the elementary schools SO IGNORED.

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 3, 2013 at 2:05 am

@ Parent: you forgot to mention that the increase would allow PAUSD to pay off the bond in 37 years @ $661mil total vs. staying on the old rate and needing 50 years and $1.9Bil to pay off the bond.

Net result is the bond is paid off 13 years sooner and with a savings of over $1.3 Bil.

Yes it was "very big of them" saving all of us from wasting 13 additional years and billions of our tax dollars.

Like this comment
Posted by Parent
a resident of Charleston Gardens
on Dec 3, 2013 at 1:29 pm

Crescent Park Dad - in the original resolution approved by the school board for the bonds to be put on the ballot, it said those bonds would be max of 40 years. Web Link
"The bonds may be issued and sold in several series, and no bond shall be made to mature more than 40 years from the date borne by that bond."

So, are they saving us 3 years? or are they now selling bonds that are 50 years? How are the selling 50 year bonds, when the school board originally agreed to sell 40 year bonds?

The size and scope of the multitude of projects undertaken all at once through this bond, and the cost per property is exhorbitant, and they have increased the annual burden on us now by 50%, by accelerating the rate, for savings 37 years down the road. THIRTY SEVEN YEARS DOWN THE ROAD...

As the number of properties in Palo Alto skyrockets, the school district's intake on this property tax assesment must also be growing. WILL that increase in the number of properties paying on this assessment accelerate the payoff the bonds or will they keep the assessment going for the full term regardless of the windfall they are receiving from increase in tax revenues related to the assessment?

HOW MUCH of the current 'windfall' is owed back to the tax payers in the form of accelerating the payoff of these bonds?

Like this comment
Posted by Fred
a resident of Barron Park
on Dec 3, 2013 at 3:51 pm

@Parent - the 37 year period covers from the time the first bond is sold until the last bond is retired. The original payoff period was 50 years; that was shortened to 37 by the board's action. The 40 year period you mention refers to the maximum term of any single bond; the actual term of the bonds sold has been 25 years or less.

When the district gets bond revenue above forecast, as they are doing now, it generally goes to reduce the term (and the interest rate in tandem) of the next bonds issued. So the taxpayers do benefit directly. If, after all bonds are issued, the revenue is still coming in high, remaining bonds will get paid off earlier, since bond revenue can't be used for other purposes.

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 3, 2013 at 7:15 pm

@ Fred - thanks for stepping in and providing a much better response than what I had posted earlier today.

Like this comment
Posted by Barbara
a resident of College Terrace
on Dec 5, 2013 at 10:34 pm

Does anyone know where the best place would be to find out which teachers are getting the benefit of the housing subsidies for which we are paying extra real estate taxes each year? Also, what is the process for applying for help and what kind of slush fund of unspent funds exists in that housing pot?

Posted by Name hidden
a resident of Greendell/Walnut Grove

on Jun 5, 2017 at 7:46 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?

Sorry, but further commenting on this topic has been closed.

Don't be the last to know

Get the latest headlines sent straight to your inbox every day.

Downtown Palo Alto gets new Vietnamese eatery
By Elena Kadvany | 5 comments | 5,228 views

More Stupid Plastic Food Things
By Laura Stec | 16 comments | 2,652 views

Operation Varsity Blues
By John Raftrey and Lori McCormick | 8 comments | 1,816 views

State Legislature on Housing: Getting the Demos out of Democracy & with it, Accountability
By Douglas Moran | 7 comments | 1,590 views

Environmentalists will soon be fighting housing advocates over what to do with the SF Bay locally
By Diana Diamond | 20 comments | 1,036 views


Short story writers wanted!

The 33rd Annual Palo Alto Weekly Short Story Contest is now accepting entries for Adult, Young Adult (15-17) and Teen (12-14) categories. Send us your short story (2,500 words or less) and entry form by March 29. First, Second and Third Place prizes awarded in each category.

Contest Details