Parcel Tax Measure Is A Board Bailout
July 19, 2018
Parcel Tax Measure Is A Board Bailout
The financial health of most California school districts has improved remarkably over the past six years. Last year, budgetary uncertainties forced 41 local educational agencies (LEAs) to declare that they may be in financial trouble.
Thanks to a strong economy and a fully funded share of state LCFF (Local Control Funding Formula) revenues provided in next year's budget, just 25 LEAs submitted a "qualified" fiscal report-which is a formal recognition to the state that a district might not be able to meet all its financial obligations in the following two years.
After years of continued deficit spending by our school board, our Culver City Unified School District shares the infamous distinction of being one of those 25 having to submit a blemished budget containing a "qualified certification." Currently, there are 863 LEAs in the Golden State.
Just the Tip of the Iceberg
It's obvious that the state increasing our funding by almost $20 million over the last six years was not enough to pay for its board's spending habits. So, members chose to deficit spend an additional $18 million over that same period. Their years of ill-advised spending choices have put this district into an unsustainable, $3 million structural deficit.
I guess they didn't believe those of us who warned them about the continued practice of deficit spending!
Now that these board members' spending decisions have led our district onto a fiscally precarious cliff, they are now asking for the community to bail them out with a $16.5 million, seven-year, $189 annual parcel tax.
Talk is cheap!
Actions speak louder than words. These board members' past actions have shown they cannot be trusted to spend any new tax revenues in a responsible manner. Don't forget, it was their spending decisions that got us into this $3 million structural deficit in the first place!
Even the First and Second Interim Reports from two and three years ago forewarned them of their deficit spending driven "primarily due to salary and benefits increases" and, yet, these members kept increasing district salaries, seemingly ignoring the district's warning signs.
A district's pension contributions are based on its employees' salaries. Therefore, it doesn't take a rocket scientist or financial wizard to know that for every year the board agreed to raise employee compensations, they also raised the district's cost of its pension contributions, thereby, worsening the district's deficit spending.
Last year, the CCUSD was one of only three districts – out of the 48 unified school districts in LA County-- to deficit spend and ended its fiscal year with the highest spending deficit at over $4.2 million. Why?
According to the district records, all four elected members of the current board have voted to deficit spend more in the past two fiscal years (16-17 and 17-18) at $9,145,00 than the previous five years (11-12 to 15-16) combined at $9,062,000.
In this last school year (2017-18), if the HR Department hadn't found a way to save over $1.85 million on employee benefits costs, the district's deficit spending would have been over $6 million more. So, their deficit spending habit is not under control, it is getting worse, not better.
Now that board members want local homeowners to give them a new influx of money. They probably will be on their best fiscal behavior, showing locals just how responsible they can be in their spending decisions. That is, until the parcel tax is passed. Once they receive their new influx of money, they will return to their old spending habits; that is, until they need even more money, down the road.
But It's for The Kids
Last time we passed a parcel tax (76% passage) was back in 2009, it brought in about $1.2 million annually. Ninety-percent of the $1.2 million went to teacher salaries. So, voters shouldn't expect anything different from this board. Most of the monies will go directly or directly to the adults in the district. It will be used to pay for negotiated raises and automatic, annual Step & Column salary increases and to pay for the district's increasing state-mandated CalSTRS and CalPERS payments--all are employee-related. So very little, if any, of this parcel tax revenues will benefit our students.
Even though many people from the community may agree with these board members on other local and national political issues, voters cannot lose sight that the effects of these members' past deficit spending has stuck our district with a $3 million structural deficit. This should leave little doubt that these members have failed to grasp even the most common sense fiscal responsibilities entrusted to them in overseeing our school district's financial stability.
The unprecedented public acknowledgement that the CCUSD may not be able to meet its future expenditures is a startling one, to say the least. These elected board members have brought our district closer to insolvency than at any time in our district's long history.
Now they want local tax-payers to bail them out with a $26.5 million, 7-year tax plan!
Most home-owners probably can afford to pay the $189 annual parcel tax. Our ability to pay is not at issue here. At issue is whether we can trust these current elected board members to spend this new influx of local revenue in a responsible manner.
Putting Jobs in Jeopardy
Proponents of the parcel tax will warn voters that by not passing this tax measure, it will put district jobs in jeopardy. But, when you read such campaign scare tactics, just remember these two facts: Over the past six years, our district's state funding has increased by almost $20 million and that it was this board's decision how to spend it and their choice to continue its deficit spending totaling over $18 million during the same time that is putting district jobs in peril.
On Their Backs
Therefore, it won't be because of the lack of state funding that is putting district jobs on the line; it will be due to the current board members' own past reckless spending that is putting local jobs on the chopping block.
Changing a Leopard's Spots
Now get ready to be bombarded with likeable, campaign rhetoric about how we should trust board members and about how trustworthy they will be, if you'll just pass this parcel tax.
To show how their recklessness has increased in the last few years, board members have deficit spent more in the past two fiscal years ($9.14 million) than in the previous 5 years combined--$9.04 million.
Below is the spreadsheet showing each member's record of deficit spending while in office: