Schools Still Smarting From the Slash in Funds : A Decade After Tax-Cutting Measure, Local Districts Scrambling for Money

Wilson Riles, former California schools superintendent, tells a story about the panic that set in when Proposition 13 slashed almost $3 billion from local education budgets in 1978.

“A mother wrote saying she had a little 4-year-old son who would be going into kindergarten next year, and she was pleading her case,” Riles recalled in a recent interview.

She said: “Mr. Riles, whatever you do, if they have to make cuts, don’t let them cut out kindergarten. If you have to cut something, cut out the 12th grade.”

Warned on Tax Cut

Riles, who spent 12 years as the state superintendent of public instruction, said he warned a lot of people about what was coming with the big property tax cut almost a decade ago.

“We lost $2.8 billion, and I had to go to the Legislature and say, ‘Look, you’re just going to have to restore it.’ We got back $2 billion that first year, which meant we lost $800 million.”

Local school boards have been scrambling ever since. Ten years later, they have little prospect of regaining their grip on the purse they once controlled.

Before tax-cutting Proposition 13, most school money had been raised locally. Revenues were fairly secure, based on regular reassessment of property that brought a corresponding increase in taxes. In a pinch, school districts went directly to voters for more money through property-tax rate increases.

Property Values Frozen

That process became history when Proposition 13 virtually froze the assessed value of property, except in cases of sale or new construction, and limited the tax rate to 1%.

Consequently, the state’s share of support for local schools increased from 42% before Proposition 13 to about double that. Teachers and other school people found themselves competing with proponents of welfare, highways and other causes.

Proposition 13 made it impossible for districts to adopt long-range plans. They became dependent on the state budget, which usually is signed into law just before the fiscal year begins each July 1.

“Teachers negotiate with local boards on salaries for two to three years down the road,” explained Riles, now an education consultant in Sacramento. “With year-to-year funding by the Legislature, it’s June before a district knows what its funding is going to be in September.

‘It Is Pure Chaos’

“Logic says there’s no way for any long-term planning. It is pure chaos, and local control is in jeopardy. He who pays the piper calls the tune--that’s the state. The Legislature pays the piper.”

Currently, the Legislature effectively decides how 91% of all school revenues will be spent, and some of them are spread fairly thinly, educators say.

“Schools have suffered in terms of finances, and the reality is that this state, which once was among the top 10 states in terms of per-pupil expenditures, is now below average,” said Herb Salinger, executive director of the California School Boards Assn.

“The general public has really never understood the kinds of cuts that so many districts made after Proposition 13 that were not restored. Our class sizes have increased to the second largest in the country. We’ve seen enrichment programs drop by the wayside and many districts are sub-par in maintenance (and) repair, and have a tremendous backlog of needs.”

Effect of Prop. 4

Making matters worse in the view of school administrators was Proposition 4 in 1979 by Paul Gann, co-author of Proposition 13. It limited state spending to increases in inflation and population.

Last year, for the first time, tax revenues exceeded what the state was constitutionally authorized to spend under the Gann limit, and $1.1 billion that might have gone to schools was returned to taxpayers.

The setback came at a crucial time for the 4.3-million-student public school system, since many of its buildings, constructed for the post-World War II baby boom, are at least 30 years old.

Many of them are in the wrong places to accommodate a population surge that is expected to bring an additional 850,000 youngsters to the schools over the next six years.

“We are facing an overwhelming crisis,” warned Bill Honig, who in 1983 succeeded Riles as state schools chief. “Our problem is that the funds, even under the most optimistic projections, will be short by $6 billion to $10 billion. Something needs to be done.”

Teacher-Student Ratio

At least another $1 billion would be needed annually to reduce California’s ratio of students to teachers--nearly the highest in the nation--to the U.S. average.

Since the old standby fund-raisers are a limited way to meet school needs, and a general tax increase is politically unpopular, the prospect of raising those billions of new education dollars is remote.

School districts have resorted to appeals for voluntary contributions of income-tax rebate checks, and they are reevaluating the year-round school schedule as a means of getting more use from existing facilities.

They also are using a 1986 law that allows them to directly charge fees of $1.50 per square foot on new residential construction and $0.25 on commercial development. But opposition to developer fees is mounting, and several dozen bills pending in the Legislature seek to limit their use.

Bonds an Alternative

An alternative is voter-approved general obligation bonds allowing school districts to go into debt for construction, and paying the principal and interest by slightly increasing the property tax.

In 1986, California voters for the first time since Proposition 13 authorized school districts to issue local construction bonds if they could secure approval of two-thirds of the electorate.

Bond measures raised $200 million last year in 19 of 30 districts that met the two-thirds vote requirement. All of those 30 measures would have passed if only a simple majority had been required, raising an additional $200 million.

Accordingly, Honig supports a proposal by Assemblyman Jack O’Connell (D-Carpinteria) to have the two-thirds vote requirement reduced to a simple majority. The measure awaits a hearing in the Legislature.

Seek Floor on Spending

Honig and other educators also support another plan that would guarantee a minimum on how much the state spends on education.

The proposed November, 1988, ballot initiative would have that spending level adjusted annually according to the cost of living and enrollment increases.

Any state revenues that exceeded the Gann spending limit would be used to reduce class size, increase instructional resources, improve teaching staff and meet other needs. Proponents recently reported that they had more than enough registered voter signatures to qualify the measure for the ballot.