In my condo complex, about 35% units are rented out. One of them is my next door neighbor.
The owner of that unit is a senior couple who live in Portol Valley, wealthy people. In their small unit, there are two young kids who attend Palo Alto schools. I wonder if the senior owner can get an exemption to the parcel tax. If they get the exemption while they receive the high amount of rent based on the higher property tax (in Palo Alto), it is like they get the parcel tax for the tenant's kids' education in Palo Alto. I don't know the details in this stream of taxation, but I hope the city knows the reality.

For people who have lived in Palo Alto for a very long time, they probably purchased homes in the $11,000—$14,000 range—homes that could easily be worth more than a $1M today. When Prop.13 was passed by the voters, 1976 was used as the initial assessment year. So, if a home were accessed at $43,000 in 1976, then based on the yearly 2% automatic assessment, such a home would be assessed at about $84,000 today—some 30+years later. At a taxation rate of 1%, the homeowner would be expected to pay about $840/year in property tax—about half of which goes to the Palo Alto Unified School District. However, California State also allows a homeowner exemption, which reduces the base assessment by $7,000 per year. So, a homeowner could reduce his property tax liability for this home to about $77,000—making the homeowner’s year tax bill come to about $770/year—reducing his contribution to the schools.

For people who moved into the school district’s jurisdiction after 1976, their tax bills could be anywhere from $10,000+ to $30,000+ per year. And just because someone is old enough to claim a senior exemption doesn’t mean that lived here before Prop.13’s arrival—such as the person in the example above.

For someone whose basic tax bill is only $800/year to browbeat his neighbors, and other seniors in the community, into paying more tax than he pays is the height of hypocrisy; the community has every right to let such people know that their attempts to manipulate public opinion through guilt, and misinformation, are pretty transparent, and not all that appreciated.

Of course, what such a person is doing is legal, under Prop.13—but is it moral?

@Just-Say-No

Wow, the author of this article is just stating his opinion. It is not "to manipulate public opinion". He says if you need the money for the parcel tax portion so desperately, keep it.

I think we should honor publicly those people who transfer the right of the parcel tax exemption to donation, like PiE does for donation, or even more publicly.

Remember, Just-Say-No, this is just my wish.

> It is not "to manipulate public opinion"

Of course he is trying to manipulate public opinion--that's what guest opinions are all about.

Sadly, the headline doesn't do the piece justice, as the schools expenditures are over $160M this year, with a $375M ($750M to retire the bonds)authorization for capital expenditures on top of that.

This is more money than the schools have ever seen--and this fellow is trying to make us believe that they are in the middle another great depression.

Easy fix. Eliminate Prop 13 for commercial property. No one ever talks about this, because large commercial property owners lobby to keep it quite. Want to know why commercial vacancy rates in Palo Alto are high, but rents are through the roof? Because owners have no interest in filling a building that is paid for with an absurdly low tax basis. They sit on these spaces, empty, until they can literally rob someone. It's a lose/lose for everyone except the owners.

How would one know if one is receiving the senior discount? Is it something one must have applied for on turning 65? Or is it automatic? On what piece of paperwork does it appear? And, if one has it, what is the process for waiving it?

Wow, now there is a constructive idea. Congratulations John Melton, on your refreshing essay. When I read the title of the editorial I was expecting another Gunn-bashing.

Well, I'm very glad for John Melton that he doesn't need his senior exemption from the parcel tax but I do. I need all the help I can get to stay afloat in this expensive community.

As an immigrant I am one of the 20% who did not have the opportunity to get a college degree. I worked from age 16 to 70, emigrating legally to the U.S. in my twenties. My home does not have prop 13 savings but I pay my property taxes like everyone else, the one break I have is the reprieve from the School District parcel tax, and like many other Seniors on a fixed income, I need it.

So, John speak for yourself, there are many seniors, like me, who are just hanging on here, or are you trying to drive us out of town!!!

Grandma, Perhaps you might consider reading what he wrote before you take him to task. He's a thoughtful person who has contributed much to this community. Now he's making another contribution and pointing out such an opportunity to those who are also able to.

I will not refuse my senior tax exemption for the sake of all the athletic fields schools build.
Just look at Palo Alto High. Nothing was wrong before PAUSD spend millions on renovations.
Is it another faucet of Palo Alto Syndrome?

Here is how apply for an examption to the parcel tax, if you are over 65:

Web Link

If your want to figure out how much property tax is being paid on a given property use the following web link.

Web Link

The historical data makes it pretty easy to figure out when someone has applied for the parcel tax exemption. It is also fun to see how much tax is paid on properties that are being rented out to families with school age children.

Back to the point of the article. Thank you Mr Melton. As a parent who donates enormous amounts of money just to retain some basic classes and class sizes, I am alarmed at how much funding per student has been lost over recent years. All the whining about taxes loses sight of who actually pays the price... our children. In a state where we spend $50,000/year for a prison inmate vs $8667/year for a student, it's shameful. If you multiply that by the number of years a student is in school vs an inmate is in prison, the difference in investment/cost is shocking. Either way, WE are paying for it through taxes and as a society.

Secondly, while the school district may have a rainy day fund to weather the storm at the moment, those funds will be drained pretty quickly with little signs of being replenished any time soon with the current economy. Where is the effort to shore up the funding?? I haven't seen any mobilization taking place like the last time funding was at risk due to budget cuts.

PAUSD powers that be, Are you listening?

@parent of Old Palo Alto

check out
www.ourchildrenourfuture2012.com

it's from the PTA council of california. It's about putting $ back into schools

TallTree and others. I would love to understand this better.

Does the "Our Children Our Future" put money back into our schools? Or is it a state-wide tax that will generally go elsewhere? It's not a local tax, right? Won't it have a relatively small impact on our basic-aid district, but a large cost?

Also, why doesn't the PTA endorse Prop 13 overhaul instead of this new tax? That would at least ensure that everyone is paying fairly, before increasing taxes even more. (Overhaul would of course have some mitigations for people that can't afford it.)

Some of us told you in 1978 that Prop. 13 was a bad idea. That giving commerial property the same tax break as Granma and Grampa on fixed incomes was a crock. That requiring a 2/3 approval for local tax increases would just force the money and the power upward, to Sacramento and Washington.

Some time after 13 was passed and the state was starting to feel the bite, educator and author Jonathan Kozol was visiting California and having dinner out with a friend. He looked around the room at the well-fed, well-clothed diners and said "California is eating its children."

I hope you enjoyed the meal, California. What's left, Granma and Grampa and the cripples, I guess.

You libertarian types can hate on me now. I won't be back to see what you have to say.

@Fairmeadow Mom -- the Senior exemption is only for owner/occupants, not for investors, so the Portola Valley couple simply ups their rent to pay for the Parcel Tax.

I have always, and will always, oppose parcel taxes because of their regressive nature. As a condo owner in PA I pay exactly the same amount as the multi-million dollar homeowners and as big businesses such as HP. That makes no sense. The loopholes for businesses built into Prop 13 have caused a shift from shared tax burden (50/50 business/residences) to a very lopsided burden placed on residential properties (tax income is now 75% residential/25% business). The loopholes allowing businesses to look like there are no changes in property ownership when, in fact, a property has been sold needs to be closed. Unfortunately, politicians are unwilling to take this on.

The additional untapped source is oil -- almost all other oil-producing states tax companies pumped out of the ground in their states. California does not. The oil companies are allowed huge profits on oil shipped to other states with no benefit to us.

Thank you for your thoughtful essay, Mr. Melton, and wonderful suggestion. As a family with children, we live as Silicon Valley "house poor" - bought a house to send kids to local schools, but after paying the living expenses, live on an amount of money uncomfortably close to the poverty line. I'm not complaining, I'm just saying we give as much as we can to PiE already and don't have resources to make up for the deficits.

No one wants to pressure seniors who need the exemption, I'm with you, but many seniors are doing very well and paying a tiny fraction of the property taxes on their homes - giving up the senior exemption if they don't need it would be a nice gesture.

However, I would want to be able to reassure them that if they did, they could access it again in the future if they needed it -- can you please amend your essay with details that would offer such reassurance?

Parent says: "As a parent who donates enormous amounts of money just to retain some basic classes and class sizes." Class size is a manipulation of the teachers' union contract. When my kids went through the PAUSD in the 1960s class sizes were bigger 26 - 35 students per class. They did just fine but today's teachers have manipulated lower class sizes and sold it to the parents as an improvement in education.

How about increasing the length of day or the number of days per year your kids are in school? In Japan kids are in school around 219 days per year and in England it's over 200 days per year but our teachers consider themselves over-worked if they are asked to teach for more than 190 days per years, and have class sizes of more than 26.

@Neighbor from Greenmeadow and John from midtown

Thank you for your information.
I have been waiting for someone like you to clear up my doubt.

Dear Grandma,
When your kids were in the schools, every classroom had a full-time aide, not so today. With fewer resources, you want to increase the number of days while scapgoating the teacher's union? It's easy to be a critic, isn't it.

When I went to school, in a lower social economic environment, the class size was about 30, with no aides.

When my kids went to school, in Palo Alto the class size was about 27, with a volunteer parent aide.

I got a better education than my kids did.

Conclusion: Go back to 30 kids per class, with no aides.

Palo Alto schools are out of control. Time to take the money away from them, until they regain some sanity.

No person over 65 should be made to feel guilty for not agreeing to pay even more of their fixed incomes to support schools that are run by the unions, and teachers who complain about their failure to control their classes with the teaching models they support.

The tone in these comments is disheartening. But given there's so much interest in school funding, maybe the Weekly would care to do a real article on it? How dire is the situation, and how can we compare the various remedies being proposed?

(And maybe another on how we can assess the quality of our schools and our teachers. Is it just that our kids are smart, and driving our test scores up? Or are they poorly behaved, and making it harder to teach? Or ...)

This opinion piece by Mr. Melton seems nice, but it's hard to imagine the proposed remedy would be effective. Saving our schools by relying on voluntary donations from some of our local seniors? Let's see some of that more incisive journalism PAW is known for.

Big picture: I hope everyone will take some time to consider not only Palo Alto, but the condition of California schools in general. We have a huge stake in supporting the education of children and college students throughout the state. Our local focus is understandable, but to paraphrase Rabbi Hillel, if we are only for ourselves, what are we? As a Palo Alto teacher, parent, and resident, I greatly appreciate the community's generosity, and benefit from it in multiple ways. But as Californian, and an American, I know that the future of the state and country is bound up in the overall success, health and prosperity of all our citizens. We must take up the cause beyond our city's borders.

Regarding class sizes, school days, etc. Simplistic comparisons do not serve us well. Our experiences in prior generations do not necessarily inform us about classrooms today. Talking about class sizes in the absence of actual numbers is not helpful. My friend in L.A. has a daughter whose 6th grade English class has 41 students. Can we agree that 41 sixth graders in a room is a learning environment that is inferior to 25 kids in the class (all else being equal)? So, class size does matter. Also, if you're talking about secondary teachers, adding 5 students per class has nearly the same impact as adding another class to a teacher's workload. To point out the added challenges we face in those circumstances seems entirely appropriate in a conversation about quality education. If anyone wants to label it whining, go ahead, but labels do not alter the underlying problems. And finally, the debate about the number of days in school must be accompanied by some discussion of what's happening during those days, and how many hours in a day. So, yes, our teaching peers in other countries may have more school days per year, but please keep in mind that the average American teacher works over 53 hours/week, and we have more students, and we spend more hours in the classroom per year (compared to teachers in Finland, Singapore, and some other high-achieving nations).

David, there's an interesting comment on a recent Economist article on California taxes. The article is here: Web Link

I'm embedding the comment below. Why are we adding yet more taxes rather than fix the tax structure we have today?

California ALREADY has the nation's 2nd highest state marginal tax rate (10.3%), 2nd only to Hawaii (11%). Even our second-highest tax rate is 4th highest in the nation and it starts at $48,000 in income for single taxpayers.

CHART: State Marginal Income Tax Rates by State (Current Law)
Web Link

Even with our current 7.25%, California ALREADY has the nation's highest state sales tax rate (local sales taxes push rates higher in some other locales).

CHART: State Sales Tax Rates by State (Current Law)
Web Link

QUESTION: Is the problem that California's tax rates are too low? Or, is the real problem that California spends too much or has the wrong spending priorities?

NONE of the proposed tax increases includes any necessary reforms to address the REAL structural problems hindering California. I will vote NO.

Parent,

I'll take a look at the link later, (gotta head out soon). But any analysis of our taxes should take into account the effects of Prop. 13, which is not mentioned in your comment. Our other taxes and fees have had to compensate in some ways. I'd also be curious about the extent to which those figures account for cost of living. And finally, I think it's worth noting that on the national level, if you look at our country's overall taxation (as a percentage of GDP), we are quite low compared to other leading nations. I think our overall tax burden is around 18% of GDP, while many other nations are well into the 20% and 30% range. It's time for Americans to take a good, hard look at facts about quality of life and realize - we are not really so exceptional. On many "quality of life" indicators we lag behind other countries. We can do better, but not without a sense of commitment to our fellow Americans. When a person is in immediate peril, we'll drop everything, all pitch in, do whatever it takes. Why no sense of urgency to help each other when we're not in immediate danger?

The analysis doesn't account for Prop 13. That's the whole point. If indeed it is largely responsible for why our other taxes are so high, then why don't we fix that? Why are we instead heaping on more of these flat taxes? Why don't we fix California's structural problem?

To the other point -- that America's taxes are too low in general -- that in my view is more of a federal issue, and shouldn't pretend to be addressed by a local, school-specific "Our Children Our Future" initiative.

Easy fix. Eliminate Prop 13 for all properties not claiming the homeowners extension. They are, by definition, not homes and are used for business purposes. They can write-off most of it as a business expense instead of being caught in AMT.