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Ticking Time Bonds: San Diego Homeowners Face Big School District Tax Bills

Pictured is a map of San Diego County. Click here to view a map of bond taxes in your district.
Pictured is a map of San Diego County. Click here to view a map of bond taxes in your district.

Ticking Time Bonds: San Diego Homeowners Face Big School District Tax Bills
The tax bills, homeowners pay for school bonds, can come to hundreds of dollars a year. And people in some of the poorest districts pay some of the biggest bills.

Homeowners throughout San Diego County — including those in some of the poorest districts — are paying hundreds of dollars in property taxes each year to pay for the financing of new and updated schools.

The tax burden can vary wildly, depending on such things as property values, number of property owners in a district, the size of the bonds and the kind of deal a school district negotiated.


For example, an inewsource analysis found that a family in the San Ysidro School District last year would have paid about 35 percent more — about $150 more — in bond taxes compared with a family in the Cardiff School District, an upscale beach community where houses are worth twice as much.

Related: Today’s Debt Is Tomorrow’s Burden In Some School Districts

The median home value — that means half are higher and half are lower — in San Ysidro is $326,100. That means a median tax of $568 is needed to pay for about $329 million of bonds on the elementary and high school districts. In Cardiff, the median home value is $736,600 with a median bond tax bill of $420.

The median amount San Ysidro residents pay in bond taxes is second only to the Rancho Santa Fe School District, where the median house costs $1 million.

School Bonds 101

Bonds are generally one of the least risky ways for school districts to raise a lot of money. Every year districts pay back some of the debt using money from those bond taxes. As long as property values keep going up, districts can easily keep up with growing debt payments.


However, those safe bonds can become expensive when property values can’t keep up with the revenue estimates calculated at the time the district issued the bonds.

Unintended Consequences

In 2000, California voters passed Proposition 39 to make it easier for school districts to pass bond measures. Instead of needing a two-thirds voter approval, districts now just need 55 percent.

In turn, the proposition also added transparency and accountability measures to school bonds. And it capped how much districts could estimate residents would pay for them. For elementary and high school districts that is $30 in taxes per $100,000 of assessed property values. For unified districts it is $60 per $100,000.

When districts are planning new bonds, they have to structure annual debt payments with those tax limits in mind. With the help of financial advisers, bond counsel and other experts districts estimate property value growth for years, sometimes even decades.

As long as those estimates match reality, the taxes homeowners pay stay within that tax limit. But around 2008, property values stopped growing and even started falling, and bond tax revenue started falling with them.

That’s trouble, said Kim Rueben, a senior fellow with the Urban Institute Tax Policy Center.

“You’ve already committed to these bonds so you somehow need to pay them back.”

To meet the obligation, the district increases taxes to cover what’s needed.

For example, when the Santee School District asked voters for approval to issue $60 million in school bonds, it suggested it would stick to a tax rate of $29.98 per $100,000. It was supposed to be capped at $30 per $100,000 under Proposition 39.

But property values started falling, and by 2011, Santee School District homeowners were paying $34.04 per $100,000 in taxes to pay back those bonds.

To avoid raising the tax rate, some districts go back to voters for an additional bond authorization. That allows for an extra $30 or $60 per $100,000 in bond taxes.

San Ysidro’s Bond Authorization

Additional bond authorizations weren’t necessary at the San Ysidro School District, where residents now pay a median tax rate of $568 for the elementary and high school districts. That’s a tax rate of $174.20 per $100,000. That district passed a $250 million bond proposition in 1997 before Proposition 39 and its tax limits existed.

At the time the bond was on the ballot the newspaper La Prensa criticized the bond election, claiming the San Ysidro school board didn’t do enough to be transparent and educate residents about the proposition. According to La Prensa, San Ysidro’s Proposition C passed with 86 percent of the vote, with a 14.3 percent voter turnout. The county Registrar of Voters wasn’t able to confirm the election numbers.

According to Dena Whittington, San Ysidro’s assistant superintendent of business services, the only limit on bond taxes is a self-imposed $100 per $100,000 tax rate, but “it would just take board action to increase that amount.”

Last year, San Ysidro School District still went over that self-imposed limit. It levied a bond tax rate of $115.97 per $100,000 on residents.

On top of that rate, homeowners in the district pay $58.23 per $100,000 for bonds in the Sweetwater High School District. That combined $174.20 per $100,000 bond tax is the highest in the county. That tax rate, for a median value home, comes out to a median tax bill of $568.

Not all residents saw their property taxes go up with the falling economy. Christopher Wright, Oceanside Unified School District’s associate superintendent of Business Services, said maintaining a reasonable tax rate was always a key part of the district’s decision-making.

“The overarching fiscal strategy, and this was in the ballot initiative, was an intent to maintain a $58.35 per $100,000 of assessed value tax rate,” he said.

That meant issuing fewer bonds than estimated, Wright said, as well as finding “other revenue sources.” That option can include deferring debt, which means future generations pay for today’s new schools.