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Prop 13’s Impact On Schools

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Video published March 26, 2010 | Download MP4 | View transcript

Above: Is Prop 13 to blame for California's near-bottom per-pupil funding in the country?

GLORIA PENNER (Host): Many critics say Prop 13, the 1978 law that limits increases in property taxes, is to blame for the decline in funding for California's schools. Today the state's schools rank near the bottom in funding when compared to the other 49 states, but pinning all the blame on Prop 13 doesn't tell the full story. Joining me to talk about the impact of Prop 13 on education is KPBS reporter Joanne Faryon, who's been investigating Prop 13 as part of our Envision San Diego series. Welcome, Joanne.

JOANNE FARYON (KPBS News): Thank you, Gloria.

PENNER: How is Prop 13 connected to education funding?

FARYON: Well let’s go back to prior 1978, back in the day when schools needed money. More money to hire students, to pay for classrooms, supplies, and so on. They basically looked to the local taxpayer for money in the form of property taxes. And in fact, they set their budgets, went to the county assessor, the property tax rate was set, and then they collected enough money. As much money as they needed. After 1978, what happened was we couldn’t do that anymore. It was a statewide cap. One percent – that’s all the money that you got. So as a result, before 1978, before Prop 13, statewide the schools had a $9 billion budget. After Prop 13 they lost $3 billion – a third of that – overnight.

PENNER: So where do the schools in San Diego get their funding today?

FARYON: Great question. Well, before Prop 13 about 50 percent of their money came – more than 50 percent came from property taxes. Today, about 20 percent total budgets come from property taxes. The vast majority comes from the state. The state through a series of ballot initiatives, measures, and laws are obligated to fund schools to a certain level. There's a small fraction that comes from the federal government, and a very, very small portion that comes from state lotteries.

PENNER: Well one measure you looked at to gauge the impact of Prop 13 on education was per-pupil spending. So let’s take a look at this graphic.

FARYON (voiceover): Here’s a look at California’s per-pupil spending for the past four decades in comparison to other states. The last time California was at the top of the heap was 1965, when it ranked 5th. In 1978 – the year Prop 13 passed –California was 14th out of 50. The next year, the state fell to 22nd place. In 1988, California fell below the national average for the first time and never recovered. The state now ranks 43rd.

PENNER: How is that decline tied to Prop 13?

FARYON: Well, we can't blame everything on Prop 13. As you can see from the graph, the decline actually began prior to 1978. And there are a couple of things that happened… pretty complicated, I’ll try to simplify. In the late 60s there was a court case that basically challenged the gap between rich schools and poor schools, and forced the state to address that issue to somehow even it all out. What happened a couple years later in an effort to address that, revenue limits were placed on schools. So basically the government said you can only spend this much, not more, on schools. Then Prop 13, it was almost like the final nail – not to use a cliché – in the coffin for school budgets. And that dramatically reduced the pool of money that was available to schools. So you add all of those things together and now – and as you saw on the graph – that very sharp decline recently, well we have the recession to blame for that. If we rely on the state for our money and the state relies on income taxes and sales tax, and we have high unemployment and we have this recession going on, they have less money. So in turn they give the schools less money.

PENNER: You also looked at the state of New Jersey as a comparison for property taxes and education funding. Where does New Jersey rank in terms of per-pupil funding?

FARYON: They’re right at the top.

PENNER: They are?

FARYON: And you know what, Gloria? I heard this over and over again last year during the big budget debate. New Jersey is at the top and California is at the bottom. So we wanted to find out first of all - is it true, and why is it true? Yes, it is true. Repeatedly, county after county in New Jersey, their schools spend more per pupil than we do in California and they have among the highest property tax rates in the country. They do not have property tax caps like we do in California. In fact, in New Jersey if you're a homeowner, you will pay more than double per capita in property taxes than if you’re a homeowner in California.

PENNER: But here our largest school district - our local school district, San Diego Unified – is considering putting a parcel tax proposition on the November ballot. So that’s another tax. How would that work?

FARYON: That’s right. And that’s been the battle for 32 years – how to get around Prop 13. So now we have it, we all love it. But what do we do? How do we find money? So parcel tax, it’s the new idea. And there are counties up in Northern California that have supported this, some school districts. So basically they're going to ask the taxpayer in that community “Would you support paying a fixed amount of money every year and this money will go to the schools? We can pay for teacher salaries. It will go directly to the classroom.” And I believe what they're proposing is $100 a year for five years. Ana Tintocalis is actually working on this and she's going to have a special report next week about parcel taxes.

PENNER: So if that parcel tax were approved, would it have to be approved by a simple majority of the voters?

FARYON: No, two-thirds majority. And that’s where we go back to Prop 13 again. If you want the state or counties or the taxpayer to approve tax increases you need a two-thirds majority. There's a bit of a twist to that. Right now, I believe officials in Sacramento, politicians are looking at changing that when it comes to the parcel tax. Asking for perhaps just a 55 percent majority rather than a two-thirds.

PENNER: Ok, well I thank you very much, Joanne, and we’re going to talk about your special that’s coming up that kind of sums all this up. Thank you again.

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