Town Square

Worst-case school cuts avoidable, Simitian says

Original post made on Jan 28, 2008

Using "magic dollars" tucked away in leftover or overbudgeted state education accounts could avoid the need to suspend the Proposition 98 funding guarantees, Sen. Joe Simitian (D-Palo Alto) told a packed audience of primarily school officials in Palo Alto Saturday.

Read the full story here Web Link posted Monday, January 28, 2008, 11:48 AM


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Posted by Give-It-The-Cut!
a resident of Another Palo Alto neighborhood
on Jan 28, 2008 at 7:10 pm

Simitian never found a dollar he couldn't spend in the flick of an eye--with nothing to show for his expenditures.

The people of California have poured untold Billions (and soon Trillions) into the public education system--and we get so little back!

Go Arny--Suspend Prop.98 if you think it will help the rest of the State's Budget!

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Posted by R Wray
a resident of Palo Verde
on Jan 29, 2008 at 12:29 pm

We are all father Simitian's children. He knows best.

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Posted by JennieLyn
a resident of Menlo Park
on Jan 29, 2008 at 2:33 pm

Good recap of the essence of the meeting -- using reserves and chucking any unspendable money back into the pot may allow California to continue to spend at the 43rd lowest rate on its children ... or did we drop to 44th recently?

Is this Prop 13 at work? That's the question everyone asks.

I think it's someone at work on Prop 13. The Santa Clara County Assessor's annual report (2007-08, page 16) shows that homeowners now pay two-thirds of all property tax dollars in the county (the money that pays for schools, fire, police, streets, courts, etc.) while commercial interests pay only 33%. When Prop 13 passed, each paid half (50%).

How did businesses get to offload the civic burden onto homeowners? Well, making a rule that property would only be revalued when sold disproportionately benefited businesses. They hang on to their property longer (when did your bank branch last move?) and can simply put their property into a corporate name, then sell the corporation ... without reassessment or a tax raise.

If commercial property tax had increased at the same rate as individual homeowners (yes, including all those retirees and people who bought their homes in the '79's and 80's), businesses would be paying $980 million more a year in Santa Clara County. That would pay for a lot of education, for decent salaries for police and firefighters, to get local potholes fixed, etc., etc.

$980 million ... or more, given the disproportionate amount of commercial building that's occurred here over 30 years. Remember the orchards in Cupertino?

Commercial property owners in California are hiding behind No-New-Taxes ... and should be able to arrange things so, eventually, they'll pay no tax at all. ("No Old Taxes, Either!")

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Posted by perspective
a resident of Midtown
on Jan 30, 2008 at 9:32 am

Go ahead JennieLyn: Drive more businesses away from our area so there is even LESS of a tax base.

Also, we have one of the highest number of kids/adults in all the states..and are losing more taxpayers than we gain as our population grows.

This means that per TAXPAYING adult in this State, we are one of the highest taxed for kids in the nation.

Put simply, if a family has 10 kids but makes 100,000/year, each kid gets less than the same financed family with 5 kids. Imagine Calif as the family with 10 kids.

It is NOT about prop 13, nor about higher is much bigger than is about more non-tax paying families with high numbers of kids.

Better to attract taxpayers, and not attract non-taxpayers. That will increase the State tax base, increasing the dollars per kid available for education.

Unfortunately, the apparent simple answer, raise taxes on everyone who already pays taxes, does the opposite..driving more taxpayers out of the state.

But, what do I care? Me and my family are set just fine. So, go ahead, keep pushing to increase taxes, and watch what California. (Remember around 2001?)

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Posted by JennieLyn
a resident of Menlo Park
on Jan 30, 2008 at 6:32 pm

You may be interested to know that one of the property tax areas that has lost the most ground is Apartments.

It's very unusual to find a block of homes that, in toto, doesn't support the number of school-age children there with property taxes. (Yes, even with all those retirees at 1978 rates!) Meanwhile, it's very unusual to find established apartment blocks that pay enough taxes to support the kids living there.

Since it's improbable that we'll be able to legislate against children, how about, at least, getting paid for them? Can we agree on that? Or, maybe, we can drive the apartment houses out of state ... then the kids will HAVE to leave?

And, yes, I remember 2001. And 1990. And, believe it or not, 1977. (I'm thaaaaat old!) But I don't remember anyone saying that Prop 13 was supposed to benefit businesses and landlords at the expense of police, fire, schools -- and homeowners.

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Posted by perspective
a resident of Midtown
on Jan 31, 2008 at 6:45 am

JennieLyn: Do you think that the owners of Apartments don't pay property taxes? Don't worry, landlords pay property taxes just like everyone else. The renters pay what the market will bear, but the landlord always pays the taxes (what are the 2 things you can't avoid in life?? one is taxes)

Your perspective is off..housing turns over much faster than businesses, so the tax base of housing has risen faster than businesses. On the other hand, business buildings are much more expensive than houses, so when they turn over, the tax goes up much faster per building.

Also, businesses BRING IN taxes to the state..perhaps a better formula would be to re-apportion the taxes the State already gets so that uselessly spent dollars goes to education.

The answer is NOT to increase taxes on Californians. Why do you think we are losing tax base to other States (almost all of whom have better educated kids with less of a tax base).

One solution...close the border and send all illegal alien prisoners home. About 1/3 of all prisoners are illegal. I forget the number, but it is huge, of illegal alien kids we are educating...

Cut the expenses by 1/3 in the prison population, transfer the funds to education where there are also suddenly fewer kids....

Another solution:

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Posted by Brian
a resident of Evergreen Park
on Feb 1, 2008 at 5:35 pm

Michigan had the same problem. Two many people and not enough parcels to pay the costs. Their solution was to raise the state sales tax 2%. A progressive tax that is spread across the population. It seems to have worked. Of course you have to budget for lean years which no government entity does.

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Posted by JennieLynn
a resident of Menlo Park
on Feb 2, 2008 at 5:33 pm

Brian: Seems to me that there are plenty of parcels to pay the cost -- we've just let one set (business parcels) quietly arrange a bit of a free ride for themselves. Why increase sales taxes on residents so that (increasingly) non-residents can continue to collect market-based rents while paying tax-capped expenses?

Midtown Resident: I am so glad that you agree with my point -- housing turns over much more rapidly (even with Prop 13-protected retirees) than business property. Hence, extending Prop 13 caps to business property has forced homeowners pick up an ever-increasing share of the property tax.

It's (somewhat) true that business buildings are more expensive than houses -- but that's an "I'll gladly pay you Tuesday for a hamburger today" argument. It's lovely that a business building will turn over someday and pay MUCH more in tax than it's paying today -- but that does nothing for my police coverage, fire protection, library access, kids' education, etc., today ... or ever, it that property is held in an LLC or trust, as an increasing percentage of them are.

Even more true is the fact that households tend to demand less of property-tax funded services as their time-in-house increases. Kids graduate. But does an apartment house demand less over time? a retail building? an office building? Nope, year in, year out, they expect the same police and fire protection, demand an educated workforce, wear out the roads with employee commutes and deliveries, and so forth.

And you caught the nub of the issue when you said, "Renters pay what the market will bear, but the landlord ... pays the taxes."

Businesses are generally renters. How many businesses own their property any more? Not many. Thus, they, too, are caught "paying what the market will bear," while landlords (retail, office, light mfrg) just pay 1% of their 1978 value increased by no more than 2%/year. And new businesses end up paying more than established ones, stifling competition and keeping prices high for all of us.

And if the renter doesn't pay ... doesn't the landlord demand that the (property-tax funded) court system evict him?

But go do the legwork yourself! I wish I knew Midtown beyond the Winter Lodge and Emergency Pet Hospital, but check out addresses on the Santa Clara County assessor's website. If it's anything like Menlo Park, you'll be amazed to discover just how little most buildings in town are paying (who KNOWS what the businesses inside them are paying!) and you, too, might start wondering why we've created a free ride for one sector of society.

In regard to immigrants: Close the border? Strangle the state's tax base? Gosh, it would be so much easier just to put anyone (housewife, contractor, farmer) in jail for three days for each instance of hiring an undocumented worker. Another three for not filing EDD payments/Social Security/etc. Presto -- no more undocumented workers. Fighting illegal immigration the way we're fighting the drug war will have the same (losing) result. That dog won't hunt.

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Posted by perspective
a resident of Midtown
on Feb 3, 2008 at 2:27 pm

Same old arguments.

If we can't put the political will and money into hiring even one FTE to check out who is illegally in our PAUSD schools by doing surprise home visits to see how many students actually live in PAUSD as required, how the heck are we gonna put the will into the thousands of government employees we would have to hire to do suprise ( and might I add, warantless) house checks on "housewives" and small businesses to catch illegals?

We have troubles accepting tapping phone calls from known high risk foreign nationals into our country! whoever thinks Michigan cured their problems with a higher tax rate..please research how much total money now comes into their state coffers. I would posit it is from 1) overregulation of our car market so that it cannot compete with foriegn cars 2) tax flight...Michigan is the poster child for what happens to an overregulated and taxed entity.

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Posted by perspective
a resident of Midtown
on Feb 3, 2008 at 2:29 pm

By the way..please come up with numbers about apartment owners and businesses not owning their own property, then explain to us how it even matters WHO owns the properties, as long as taxes are being paid.

Unless you think owners of business and rental properties live longer than us regular people who die and sell our homes??