Mark McDermott

Manhattan Beach School district will consider parcel tax

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by Mark McDermott

 

The Manhattan Beach Unified School District is considering a parcel tax to address a slew of oncoming financial challenges.

Farnaz Flechner, the executive director of the Manhattan Beach Education Foundation, gave a presentation at the school board last week in which she outlined the predicament MBUSD finds itself in. Despite the community’s relative wealth, its school district is now the fourth lowest funded in the state of California. And with pension and other costs projected to skyrocket in the next few years, MBUSD is almost certain to face drastic budget cuts —  and hence program reductions —  unless another source of funding is found.

MBEF has bridged the gap for the district thus far. Last year the foundation contributed $5.8 million in grants to school programs, a number that will be significantly larger this year. But Flechner told the school board that MBEF’s contributions are not a sustainable way to bridge upcoming financial challenges. She suggested a parcel tax is the most logical solution.

“I don’t really see our community as having the capacity to just step up year and after year and double and triple the funding,” Flechner said. “And so I think this is one of the strategies that seems a little bit viable for community to think about.”

“It’s amazing the amount of local support we get, but is it enough to support the gap we are forecasting? It’s not enough,” she said.

Part of her presentation —  which Flechner has given 50 times throughout the community —  showed state funding for socioeconomically comparable districts. Per pupil state funding in Laguna Beach schools, for example, was $16,941 last year, Piedmont was $14,561, and Santa Monica-Malibu was at $13,195; MBUSD per pupil funding was $9,603. (The national backdrop is even more dramatic —  school districts in New York, Alaska, D.C, and New Jersey average more than $20,000 per student in state funding).

The difference in Laguna and Santa Monica is because the state assigned the districts a different revenue model —  called “Basic Aid” —  while the difference in Piedmont is because the district is partly funded by a local parcel tax.

The roots of the district’s funding challenges go back to Prop. 13, property tax reform enacted in 1978, which both limited tax increases and also took local control of property tax revenue away from school districts. The intention was to create greater equality in school funding throughout all districts, but among the results statewide was an overall reduction in per-pupil funding. In 1965, California was the top ranked state in education funding. By 1985, California had dropped to 14th. Last year, the state ranked 44th nationally in per pupil funding and dead last in both teacher-to-student and counselor-to-student ratios.

The financial impact locally has been even more severe. MBUSD was a K-8 district at the time Prop. 13 passed. It was designated a “Revenue Limit” district by the state, meaning its property tax contribution was frozen at that level — despite the fact that it added Mira Costa High School in the early 1990s when the South Bay High School District folded. As a result, many school districts under the Basic Aid model, such as Laguna, retain 80 percent of their property tax dollars for educational use. MBUSD retains only 20 percent of the property taxes Manhattan Beach residents pay.

This is unlikely to change anytime soon, Flechner said. Prop. 13 reform, even applied to only commercial properties and not residential, is a non-starter at the state level.

“Every time a politician proposes a shift in Prop. 13 funding, that becomes the death of that politician,” Flechner said. “[So they say], ‘Don’t talk about it. We are not going there.’… California has made great progress in achieving equity and getting more funding to communities in need, but overall funding for students is inadequate.”

MBEF has worked with state legislators, particularly State Senator Ben Allen, in hopes of finding legislative solutions specific MBUSD’s plight. But there is little promise of change that could help the district emanating from Sacramento, where the last big overhaul to education funding —  the Local Control Funding Formula implemented in 2013 —  again focused economically disadvantaged school districts. LCFF targeted districts with the most students eligible for reduced lunch programs and English language learners. MBUSD has the lowest number of students who qualify for supplemental funding in LA County.

“The argument could be made that our state taxes are subsidizing some schools but not subsidizing our schools,” Flechner said. “And why is that? There is a lot of political thought there…but the feedback we are getting is this is not going to budge. So that leaves us with a parcel tax.”

The school board was in agreement.

Board president Jennifer Cochran praised Flechner and the many ambassadors she has created to give her presentation for creating more awareness in the community. She noted that the last time the district sought a parcel tax, in 2003, the ballot measure failed because few people understood the district’s unusual financial dilemma.

“By sharing this the way you have throughout the community, consistently and regularly for this period of time, there is so much more knowledge [of MBUSD finances] now than ever before,” Cochran said, noting that the district’s financial plight could worsen even from its current situation. “With a new governor everything could change…So we have to move quickly.”

School board vice president Karen Komatinsky said the community itself, has also changed, echoing Flechner’s remark that Manhattan Beach was no longer as “blue collar” as it was at the time Prop. 13 passed and education funding was less prioritized.  She also noted that community activism had increased.

“In the last two years we’ve seen huge changes on the community side,” Komatinsky said. “We’ve seen the community come together and do what we did last year and get these two bond measures passed, and we just saw this massive community effort for hurricane relief. It goes back to the fact that this community can do a lot when they put their minds to it and really get behind it.”

The district faces two immediate large financial challenges. The district received $11.4 million in funding for the implementation of new Common Core curriculum standards over the last three years. That funding ceases this year, while the implementation does not, so MBEF is providing grants towards that program. More troubling is the impending impact of pension costs. The state has shifted more of the cost of pensions to employees and the district. The district’s contribution of 11.7 percent toward CALPERS funding in 2014-15 will increase to 21.6 percent by 2020 and over 28 percent by 2028.

Board member Ellen Rosenberg said MBEF has helped keep the district financially intact thus far but could not be expected to meet the increasing challenges the district faces.

“The Ed Foundation has grown so much,” she said. “It’s just seen as the reality, but it can only go so far.”

Rosenberg said the next step is to determine community support and how much revenue could be expected from a parcel tax. “The biggest thing is we have to figure our polling, and numbers,” she said.

“Let’s quantify it,” said board member Bill Fournell.

The board will further consider the matter at its Oct. 4 meeting.

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