Basic Aid Schools

By John H Barton

California faces an extraordinary budget crisis and every agency must make difficult cuts. But each cut must be designed to minimize unintended consequences, be just in the context of the entire budget, and practical in the short run. Given this, the Governor's proposal to take Basic Aid funds should be a concern for all. There are approximately 60 Basic Aid districts. They differ from the 940 "Revenue Limit" districts in that their local property taxes exceed their revenue limit and they keep this difference. The Governor proposes to take 100% of the differential and impose across the board cuts of about 4% that all school districts face. Initially this raid might sound fair but, upon review, it fails the above three tests. The consequences far outweigh the benefits, the cuts are disproportionate, and they are essentially impossible to implement. These Basic Aid dollars would add about $140 million to the general fund but remove $100 million from the Bay Area economy. Since 85% of district budgets are salaries, staff layoffs will be inevitable. These perennially underpaid professionals will, in turn, spend less and perhaps take their skills, and dollars, out of the area. Ominously there may also be a long term effect on property values. There is a psychic link between perceived quality of schools and property values. Should that perceived quality drop, property values may fall as well - depriving the Governor of the very dollars he covets. The long term effect of losing $100 million, and lowering property values, is clearly unknown. But even an optimist must believe it will be severe. Davis' proposal sets the precedent that it is acceptable to shift locally generated taxes to the state with no notice. Current school district parcel taxes could be deemed "extra" and the value of that tax deducted from a district's revenue limit. City taxes could be attached or a greater percentage of sales taxes sent to Sacramento. Residents, council members, and board members should be alarmed.

This is a looming financial disaster for Basic Aid districts and, ironically, for the state as well. The governor's proposal will bankrupt many districts in coming years. Agencies will be unable to absorb a 25-48% revenue decrease and meet their ongoing financial obligations. Those districts will be taken over by the State, a scenario that has little in its history other than failure and substantial cost. The irony here is that removing $140 million from 60 districts does not add one penny to education it lowers expenditures by $140 million. Local tax dollars, which for a generation have been spent on local educational needs, will now go into the General Fund. It is this unjust "leveling down" that should concern all. Pretending that this revenue shift will heal the budget is perverse when the prison budget is slated to grow and San Quentin can plan a new "state of the art" death row. Simply removing the San Quentin proposal would obviate the need for the Basic Aid shift.

$30 billion is a tremendous challenge. $140 million does not help much but hurts children and families tremendously. All school districts must participate in the state's budget solution. But to take local taxes, put teachers on the street and bankrupt stable, locally managed, agencies while improving death row is nothing less than a policy failure of the highest order. With others, Palo Alto Unified School District, is leading grassroots efforts to quash this shortsighted proposal. We look forward to preserving our local school systems this year and our local