For the first time, the Gilroy Unified School District is exploring the possibility of a flat parcel tax that could cost local residents and businesses anywhere from $50 to $300 per year.
A yawning state budget deficit and seemingly eternal questions about how much funding Gilroy schools can actually count on prompted a serious discussion among GUSD trustees about taking the matter into their own hands.
“It’s clearly very depressing,” said GUSD Trustee Mark Good, during Thursday’s Board of Education budget study session at district offices on Arroyo Circle.
Talk of a parcel tax – which would need a two-thirds majority vote to pass – follows the threat of GUSD losing millions in state funding for the 2012-13 school year.
In reality, the fiscal panorama is ugly, or uglier.
If Gov. Jerry Brown’s recently proposed $6.9 billion tax initiative passes, GUSD will “only” lose $2 million in funding.
If the initiative doesn’t pass, GUSD could lose up to an estimated $4.6 million; the cost equivalent of 15 school days next school year.
The Board of Education agreed Thursday to further discuss a parcel tax during a Feb. 2 budget study session; possibly with a consultant present to help answer questions. Trustees reiterated, however, they have not officially decided to pursue a parcel tax.
They’ll have to consider a plethora of factors, including the cost of polling – anywhere from $25,000 to $30,000 for a district of GUSD’s size (employing roughly 1,000 employees and serving more than 11,000 students); when to put the tax before voters; and the likelihood of raking in 66.7 percent “yes” votes – “a very high bar to hit,” noted Rebecca Wright, GUSD assistant superintendent of business services.
Trustee Good touched on this, speculating as to Gilroy’s receptiveness to the idea of an annual property tax that could last between four to seven years.
“We’re the foreclosure capital of Santa Clara County, so in addition to it being very hard to pass a parcel tax here, it’s unfair to throw this on the backs of people who are already barely making it,” he said. “On the other hand, there’s a lot of bank-owned properties, so that would make me feel a little better.”
Wright explained school district elections may only be conducted on an “established election date,” which includes March, April and November in even-numbered years; and March, June and November in odd-numbered years. Additionally, the law also permits an election to be held in May and August of each year, as well as June in even-numbered years – but only if mailed ballots are used.
While Wright alluded to the difficulties of trying to arrange a mail-in ballot as soon as June, Trustee Jaime Rosso delivered an impassioned argument for giving “our due diligence” in weighing the feasibility of this option. Come the “watershed” of other tax initiatives and “onslaught of issues” vying for voter’s attention on the “humongous” November ballot, a mail-in June ballot “may be the early bird that catches the worm on this one,” he said.
This way, “if all else fails, we may have something to pick us up when the state leaves us hanging,” he continued. “Then at least we made the initiative on our own not to depend on everybody else, but to decide our own fate.”
GUSD Superintendent Debbie Flores chimed in on this, noting there could be up to five other school-related measures on the ballot among the gaggle of November initiatives. Trustee Dom Payne agreed: June would have the advantage of “being less muddied with other measures,” although he highlighted the immediate task of “taking the temperature to see if there is even a possibility.”
GUSD Co-President Tom Bundros joined this chorus of thought. He’s concerned about waiting until November, “when voters will just go tilt and start saying ‘no’ to everything.”
Trustees queried Wright as to how much a mail-in ballot would cost the district; a figure she did not have but will provide in the future. Polling, she also reminded them, “is a snapshot in time; not a crystal ball.”
A parcel tax would mark the first big push for local K-12 funding since voters passed Measure P, the $150 million school facilities bond Gilroyans approved in November 2008. The approval of Measure P authorized the district to sell $150 million worth of general obligation bonds to be paid off over the next 40 years with local property tax revenue. Under Measure P, property owners currently pay $60 for every $100,000 worth of assessed property value.
Unlike a bond measure, however, which can only provide funding for capital projects, a parcel tax may be used for virtually anything: Teacher salaries, books, computers, etc. and for vulnerable programs such as art and music.
Wright explained the law does not specifically limit how the tax proceeds may be spent, but the school board may impose any limits in the ballot measure if it wants to.
As for the life expectancy of a parcel tax, there is no set term. Wright said four years has been the traditional mark, but noted taxes lasting more than five or seven years are increasingly common. The tax would be set up as a flat rate and apply to all residential, agriculture, commercial, industrial, recreational and underdeveloped parcels; the only exception being the homes of senior citizen taxpayers 65 or older.
Working with a parcel tax analyst, Wright created a chart demonstrating the possible amount of tax per parcel; options included $50, $100, $150, $200, $250 and $300 per year. A $50 parcel tax, for example, would provide $735,000 in revenue annually.
Trustee Rosso said one of GUSD’s strongest arguments for community support is the recent uptick in scholastic achievement; specifically its high scores and promising progress in this year’s Academic Performing Index.
“Our improvements will be easily undermined if we start cutting out the programs that are significant and dear to our hearts,” he said. “We can just sit on our hands and keep doing what we’re doing and take what the state dishes out, or we can explore what the options are to be proactive and make sure that our schools continue to show progress and improvement.”
