Higher Taxes Hide Behind ‘Reform’ Label

The Democratic majority in the state Legislature wants to make it easier to raise taxes--not a startling bit of news--but, astonishingly, the “reform” they advocate will mean taxes falling more heavily on the poor. That is exactly what the Democrats will accomplish with their renewed effort to lower the vote requirement from two-thirds to a majority for passing local school bonds.

Attempts to enact this change have been going on for years. In 1993, when the Legislature qualified a measure to change the two-thirds requirement in the California Constitution, the voters overwhelmingly rejected it.

Still, the proposal comes back every year. Sen. Jack O’Connell (D-Carpinteria), who has spent a good part of his legislative career promoting this idea, quickly introduced a bill at the opening bell of the new Legislature. Once again, he has included language that allows two bites at the taxpayer’s wallet. If the measure gets out of the Legislature and fails on the primary election ballot in 2000, it automatically appears on the general election ballot the same year. This would occur without any subsequent vote by the Legislature (even if it is overwhelmingly rejected by the voters on the primary ballot), thereby ignoring the will of the voters.

Assembly member Kerry Mazzoni (D-Novato) has also introduced a similar vote reduction constitutional amendment. O’Connell says, “this is the year” that the Legislature will put the reform amendment on the ballot again. O’Connell and his fellow Democrats’ optimism arises from the suggestion that this change is a school reform issue at a time when support for education improvements is surging. But lowering the two-thirds vote is a tax issue. While voters support better schools, a postelection statewide poll last November by Charlton Research shows that voters strongly favor (by a 2-1 margin) keeping the two-thirds vote for local general obligation bonds.

If the vote requirement is lowered and school-facility funding falls more heavily on local taxpayers, the tax burden will fall disproportionately on taxpayers in poorer school districts.

Local bonds are paid off by increasing property taxes. Property taxes are calculated by multiplying the assessed value of the property by the applicable tax rate. Differences in property wealth between school districts result in property-poor districts having to tax at higher rates than property-wealthy districts while producing far fewer dollars. For example, to raise an amount equal to $100 per student, the property tax rate in Beverly Hills (a district having a high assessed valuation per student) would only be about $6 per $100,000 assessed valuation. However, in Lynwood (a district having a low assessed valuation per student), it would take a property tax rate of about $126 per $100,000 assessed valuation to raise that same amount.

Minority communities, especially the newly politically powerful Latino communities, will be hit the hardest by these substantial disparities.

California has faced this equity problem before when general school funding relied more heavily on property taxes. The recognized funding disparities led to the landmark California Supreme Court decisions of 1971 and 1976 in Serrano vs. Priest. While the court moved to equalize as much as possible the amount of money spent on students in different districts, it also recognized that unequal facilities were being built using local property taxes for funding. The 1976 ruling said in part: “The system before the court fails in this respect, for it gives high-wealth districts a substantial advantage in obtaining . . . high-quality buildings.”

Ironically, the Serrano case was triggered by a then-allowable majority vote rule to raise property taxes for school funding. While the requirements of Serrano have not yet been extended by the courts to the financing of school facilities in California, lowering the standard to make it easier to increase property taxes will increase the likelihood of such an extension. In a similar case in 1994, based exclusively on capital costs for schools, the Arizona Supreme Court declared unconstitutional the reliance on property taxes as the principal revenue source for school construction.

Pursuing a constitutionally suspect remedy to finance school facilities, which will unfairly burden taxpayers in the poorer districts with higher taxes, is an ignominious way for the new, Democratic-controlled state government to begin its education reform.