The Governor's Retort: Cities have an obligation to help fund schools

Click on this link to get the original article with lots of wonderful links: Morning Report: The Governor's Retort
January 25, 2011
Voice of San Diego
by Andrew Donohue

The San Diego leaders fighting Gov. Jerry Brown's plan to kill redevelopment have a simple, digestible argument: Sacramento should get its grubby hands off of our local money and solve its own problems.

Looks like Brown, though, might have just one-upped them.

He's framing the debate in a different way: His plan takes $1 billion away from redevelopment and gives it to the state's ailing schools. Scott Lewis takes that a step further and shows how education was originally supposed to be the very check and balance against redevelopment abuse, but Prop. 13 did away with that.

People like Mayor Jerry Sanders and Councilman Kevin Faulconer have big dreams for San Diego's redevelopment money - things like Convention Center expansions and football stadiums - and are fighting hard against the governor.

"But Brown has now illustrated better than ever before that the money for these dreams comes from education more than anything," Lewis writes. "The state will continue to plow money into education but it's time for downtown and other redevelopment areas to do their part.".

And the Blight Beat Goes On

• Faulconer got six of his colleagues to join him in waving their fists at the governor on Monday night, though they have yet to engage in the last-second redevelopment binges that other cities have enjoyed.

• Our Liam Dillon, meanwhile, is waving his fist right back at the city's downtown redevelopment agency. He's begun our latest public records battle — Blight Watch.

That agency, the Centre City Development Corp., has refused to turn over documents that go to the very core of the agency's continued existence. Agencies have 10 days to turn over documents after a public records request except in extraordinary circumstances. It's been than seven weeks and all we're hearing is that "it's complicated."

We'll be dialing up the pressure this week to ensure that the public records do indeed become public.

• There's another aspect of redevelopment suddenly getting attention now that it's in jeopardy: affordable housing.

One CCDC official recently made the bold claim that his agency had created more affordable housing units than all of Los Angeles' redevelopment areas combined. We fact checked it and here's what we found: A big fat "false."...

California’s Loophole-Ridden Commercial Property Tax

On May 6, 2010 at Logan Elementary in San Diego, David Lagstein of ACCE announced a report (below) about corporations that avoid property taxes in California.

"[I]n virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased..."

System Failure: California’s Loophole-Ridden Commercial Property Tax

List of corporations that avoided appropriate property taxes

Our new report documents the county-by-county shift in the property-tax away from commercial property to residential property in part 1, and in part 2 shows how many major properties fail to pay their fair share of property tax...

1. In virtually every county, commercial property is paying a far smaller share of the property tax since Proposition 13 passed in 1978.

2. Commercial property is able to exploit huge loopholes in the law to avoid reassessment upon change in ownership.

The first part of the report, “Who Pays the Property Tax” provides county-by-county data on the changing shares of the property tax between residential and non-residential property. It is based in part on newly-discovered county survey data reported over many years to the Board of Equalization (BOE) which to our knowledge has never before been examined and utilized, and in part on data provided by county assessors, some of whom have substantial records going back in time.

The data is consistent throughout the state: in virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased.

Some examples:
...Contra Costa County, the residential share of the property tax went from 48% to 73%
...Santa Clara, the residential share went from 50% to 64%, despite massive industrial/commercial growth
...Los Angeles, it went from 53% to 69%
...Orange, it went from 59% to 72%

Sorting Out Prop 13’s Impact On Education

Sorting Out Prop 13’s Impact On Education
By Maureen Cavanaugh, Natalie Walsh
KPBS
These Days (Mon.-Thurs. 9-11 a.m. on 89.5 FM)
March 29, 2010

Prop 13 has had a profound impact on California. We'll examine the huge savings to property owners and the negative impacts on education.

...[MAUREEN] CAVANAUGH: I want to ask you, Joanne, what you found out about how Prop 13 has, indeed, impacted, affected the – our education spending in California.

FARYON: Right, and education, again, before Prop 13, more than half of school budgets came from local property taxes. Today, that’s down to 20% so, again, a dramatic shift that before Prop 13, I believe the state had a $10 billion education budget, after Prop 13 they lost, overnight, a third of that, more than $3 billion. So education seemed to be the biggest loser in all of this. So what happened? Well, the state had to take over, that you couldn’t just say, okay, we’ve passed this proposition now, schools, we don’t have any money for teachers. So through a series of laws and ballot measures, a different form of funding for education came into play. And I have to tell you, I’ve been exchanging e-mails with somebody who studies this and he – it’s so complicated, his joke was that only five people in the state of California understand education funding and they can never be on the same plane together. So it’s a very complicated formula. But the bottom line is, the state is now on the hook for more than half of school budgets. What’s happening? What do we see today? Well, more cuts to education. Why is that? Well, if the state is relying so much on income tax and sales tax and corporate tax for its money—and we’re in a recession—all of those taxes get decreased. So you really have this ballooning affect, lower property taxes, lower income taxes, less money for the state, less money for the county, and education really ends up suffering because of it.

CAVANAUGH: And I believe that you found out some statistics about the spending per pupil, how California’s amount has gone down over the last 30 years.

FARYON: Yes, and so, again, we got really great comments throughout this project, people asking questions and it was, again, an e-mail that kind of prompted this research. And somebody wrote to me and said, look, I really want to know per pupil are we really spending less? Have we been spending more every year? What’s the deal? So what we can tell you is every year California does spend more per pupil than the year before. I think I might’ve seen one or two years where you saw that number either decrease or stay about the same but overall every year we spend more. But relatively speaking, in terms of the rest of the country, what are they spending? We’re not. We are increasingly spending less than other states and so we looked for the past more than 40 years. 1965 was the last time California actually was at the top of the heap and we were number five in terms of the rest of the country in what we spent per pupil. At the time, in 1978, when Prop 13 passed, I think we were 14th. Immediately after, after the proposition went through, we fell to 22. In the eighties, we dipped below the national average, and we’ve never recovered. We’re now at number 43.