UPDATE, 8:20 PM June 4 The polls have closed. LAist is following this developing story and will post a separate story as results become available.
Last January, Los Angeles Unified School District leaders ended an historic teachers strike by promising to, among other things, decrease class sizes and hire more support staffers -- promises that came with a price tag.
At the time, district leaders said that price tag would overwhelm LAUSD's already-stretched budget as soon as 2021. But L.A. Mayor Eric Garcetti urged the district to take a "leap of faith" -- agree to the union's demands in the short-term, and hope that a new, stable source of funding would materialize.
On Tuesday, June 4, voters in LAUSD will decide whether to create a new funding stream. If approved, Measure EE would enact a parcel tax that would generate enough money to, theoretically, allow LAUSD to sustain smaller class sizes and staffing increases over the long-term.
But critics question whether LAUSD leaders would be good stewards of the money. Measure EE opponents argue LAUSD has done too little to curb rising costs -- which, they argue, would increasingly gobble up parcel tax dollars before they ever reached the classroom.
Here's what you need to know before heading to the polls to vote:
WHAT IS A PARCEL TAX?
Basically, a type of property tax. But unlike normal property taxes, a parcel tax cannot be charged based on how much your property is worth -- California's Proposition 13 prevents that. Instead, most parcel taxes are flat fees to property owners, regardless of their parcel's value or size.
But some school districts impose parcel taxes on a square-footage basis -- and that's what LAUSD's Measure EE would do.
Parcel taxes require a two-thirds majority of voters to pass. That's a high bar -- but since 2001, roughly three out of five school districts that have placed parcel tax measures on the ballot have managed to clear that threshold, according to local government analyst Michael Coleman.
IF MEASURE EE PASSES, HOW MUCH WOULD I PAY?
Sixteen cents per square foot of improvements on your property -- so if Measure EE passes, the owner of a 1,000 square-foot home would pay $160 every year for the next 12 years. (There's a legal dispute about what constitutes an "improvement" under LAUSD's proposal, but we'll get back to that.)
The median homeowner within the boundaries of LAUSD would pay $288 per year until 2031.
But several groups of property owners wouldn't have to pay:
- Anyone over the age of 65 who applies for an exemption.
- Anyone receiving Supplemental Security Income.
- Anyone receiving Social Security Disability who makes less than two-and-a-half times the federal poverty threshold, which varies based on your household size; roughly $57,000 per year for a family of four.
BTW, WHAT IF I RENT?
If your building is rent-controlled, your rent cannot increase by more than 3-5% per year. A new parcel tax would not give landlords an excuse to go beyond that.
If your building is not rent controlled, though, your landlord might be able to pass along the cost of a new parcel tax to you.
HOW MUCH MONEY WOULD MEASURE EE GENERATE?
An estimated $500 million a year -- and LAUSD-authorized charter schools would get a cut of that revenue. (Since they enroll almost one-fifth of the students in L.A. public schools, they'd receive almost one-fifth of the money.)
Still, even for a district that spends roughly $8 billion on operating costs each year, that kind of money is a big deal.
Consider: in July 2021, a $228 million bill will start coming due. That was the price tag for a package of class-size reductions and staffing increases for nurses and counselors that LAUSD leaders promised to the teachers union in their strike-ending agreement. Currently, the district says it doesn't have the money to keep that promise. Measure EE could change that.
HOLD UP, NOW -- WHAT WOULD COUNT AS "SQUARE-FOOTAGE" UNDER THIS TAX? MY HOUSE? MY POOL? MY GARAGE?
Welcome to the legal dispute that has cast a cloud over the vote on this tax.
LAUSD says Measure EE would only tax the square footage of a residence itself -- not your garage, pool, storage shed or sturdy gazebo.
Opponents aren't so sure. After the L.A. Unified School Board voted to send Measure EE to the ballot, Superintendent Austin Beutner ordered a last-minute change to the legalese in the ballot measure's text.
The Howard Jarvis Taxpayers Association sued, claiming Beutner's change made many more types of structures subject to the tax -- including, possibly, parking garages -- without the school board's consent.
LAUSD officials have called the suit "meritless." L.A. County Assessor Jeffrey Prang has also said his office's electronic databases only include the square footage of the residences themselves. That means applying Measure EE to parking garages or pools, Prang said, would require digitizing a huge volume of property records at great expense.
LAUSD board members passed a resolution clarifying that they never meant to tax parking lots and garages. But opponents say the board could reverse this resolution with a simple vote -- and the new language, which calls for a tax on "all buildings or structures erected on or affixed to the land," theoretically gives the district license to apply Measure EE to far more properties in the future.
An L.A. Superior Court judge is scheduled to start sorting this out at a hearing on Thursday -- two days after election day.
IF THIS PARCEL TAX PASSES, WHAT COULD LAUSD DO WITH THE MONEY?
Measure EE revenue would go into LAUSD's general fund. District officials wouldn't be allowed to use this money for construction, building renovations or land purchases.
Outside of those restrictions, they'd have a lot of freedom to spend this money as they see fit. But while the ballot language includes a broad list of uses for Measure EE funds -- from supporting vulnerable students to providing "necessary administrative services" -- Beutner said the strike-ending deal with the teachers will be the first priority.
"This goes to reduce class sizes," Beutner said in an interview Friday. "This goes to add nurses, counselors and librarians to schools. Crystal clear."
But LAUSD has pressing obligations beyond promises made to the teachers union. To name a few: the district's costs for employee healthcare and benefits are rising steadily -- and could almost double by 2031 if present trends hold. Pension costs are rising, too. Declining enrollment compounds the challenge.
"The reality is they have too many obligations for the money they're trying to raise," said Jerry Neuman, board chair of the L.A. Area Chamber of Commerce. Next year, LAUSD's own projections show the district spending $576 million more than it'll take in.
"They say they're raising $500 million," Neuman said, "and they have all of these other commitments ... How can you say that you guarantee [parcel tax revenue] is going to these new commitments and not to the [nearly] $600 million hole that they have?"
IF THIS PARCEL TAX FAILS, WHAT'S NEXT?
LAUSD should close out the financial year with more than $1.8 billion in its bank account -- so the district at least isn't in immediate danger of running out of cash.
Still, the district's financial regulator, the L.A. County Office of Education (LACOE), has been sounding louder and louder alarms about the district's finances -- and Measure EE's failure would certainly complicate LAUSD's efforts to assuage their fears.
LAUSD officials have until July 1 to submit a balanced three-year budget to county. If the district can't balance its books over the next three years, LACOE officials have threatened to appoint a "fiscal advisor" -- a powerful overseer with the ability to overturn school board decisions and potentially force difficult budget choices.
That said, district leaders aren't placing all their chips on Measure EE. In the near term, Beutner said the district has already taken steps to shore up its finances, including reducing positions in the district's headquarters and making a change to shave $50 million off its annual health care costs (which currently top $1 billion).
"If we're unsuccessful," he added, "we're going to keep going forward because we have the broadest, deepest, most diverse coalition in support of public education in a generation."
If Measure EE fails, LAUSD could bring forward another parcel tax in a future election, such as the March primary, when voter turnout is bound to be far greater.
But even if the district doesn't place another proposal on the ballot, many of the same supporters of Measure EE are already working on a separate campaign to create another source of revenue.
In November 2020, Californians will consider a ballot measure that would repeal some parts of Proposition 13. The so-called "split-roll" measure -- backed by, among other groups, the teachers unions who also support Measure EE -- would give local government entities, including LAUSD, greater power to collect property taxes from commercial properties, but not residential properties.
In many ways, the Measure EE campaign in L.A. is a dry run for the split-roll vote next year.
"Split-roll can only win if they carry Los Angeles," said the Chamber's Jerry Neuman. "By taking the Los Angeles area and putting it into this test case, Measure EE, the union and all the supporters for split-roll are gaining market data, voter data ... that can then be utilized in the split-roll campaign."
LAUSD could still appeal to Sacramento for an increase in K-12 funding, as newly elected school board member Jackie Goldberg has been advocating.
And if even that doesn't happen -- and we're really deep into hypothetical territory now -- LAUSD leaders still have a few options of last resort if Measure EE doesn't pass, including revisiting the promises it made to the teachers last January: the district could request the union return to the bargaining table to renegotiate its class size levels and staffing numbers to avoid even deeper cuts or layoffs.
Correction: The original version of this story incorrectly described proposed exemptions from the parcel tax aimed at low-income property owners. The story has been updated to clarify property owners must be receiving Social Security Disability or Supplemental Security Income to qualify for the exemption. LAist regrets the error.
