On February 24th, Jay Beard replied to a post by Colleen Sullivan on Nextdoor (link access is restricted to certain Nextdoor user neighborhoods) and asked if Measure Y funds merely replace money that would otherwise be provided by the state.
I replied at the time that this was not the case, but since school finance rules are so complicated, I asked the district for confirmation. I have received their reply and am passing it along on Nextdoor and my blog.
The Superintendent and CBO confirm below that if Measure Y does not pass, the district will lose around $7,000,000 per year, and the state will NOT replace these funds. Their explanation of school funding follows. It is rather detailed, and the answer at the end is that failure to pass Measure Y will substantially hurt the district. The Measure Y parcel tax money falls into a different “pot” that is not subject to state replacement.
My thanks to Chief Budget Official Carolyn Chow and Superintendent Dr. Joan Rosas for compiling the following information. In the first paragraph below, reference is made to an SF Chronicle article about school funding that was cited by Jay Beard on Nextdoor (see link above). Note that even though parcel taxes are placed on the same overall tax bill that we pay twice a year, there is a clear distinction between regular “property tax” and a special voter-approved “parcel tax.” This distinction places these funds in separate school funding categories.
Ballots are due by March 28th!! Please remember to mail in your ballot soon! Measure Y renews an existing tax, previously called Measure A, and does not raise your tax bill.
Detailed response from Carolyn Chow and Dr. Joan Rosas:
There are four sources of revenue: Local Control Funding Formula (LCFF), Federal, Other State and Other Local. The LCFF is the major source of funding for school districts. This funding is based upon a calculation of number and type of students and then funding is allocated on a per student basis. In this source of revenue, local property taxes are paid to the district and the state makes up the difference between the amount received in property taxes and the LCFF calculated entitlement. Districts that receive property taxes in excess of the LCFF entitlement are allowed to keep the property taxes generated by their community. These districts are called “Community Funded” or Basic Aid. Although I have not seen the article, I believe this is what the person in the SF Chronicle is attempting to refer to but incorrectly used “parcel tax” when they should have used “property tax”. This is the largest source of revenue for the District at $96 million, and is 78% of the District’s annual revenue.
Federal revenue is limited and supports only a few restricted programs. Examples of Federal revenue received by SMFCSD are special education funding through Individuals with Disabilities Education Act (IDEA), and funding for Title I (targeted to meet educational needs of low achieving students in high poverty schools, Title II (teacher improvement and training), and Title III (language instruction for English learners) programs. All federal funds are restricted and can only be spent in support of these specific programs. Federal funding represents 3% of the District’s revenue, or $4.2 million.
Other State revenue is state revenue that is received outside of the entitlement from the LCFF funding source. Other state revenue includes funds from the state Lottery, reimbursement for the performance of state required mandates, and recently, one time money (not an ongoing source of revenue) allocated on a per year basis by the Governor. Other State revenue is 8% of the District’s revenue, or $10.3 million.
Other Local revenue is funding from local sources. Examples of Other Local revenue include parcel tax revenue (requires a 2/3 voter approval), interest, PTA donations, other parent and community donations, and revenue received from the rental of district facilities to outside users. Other Local revenue is 11% of the District’s revenue, or $14.5 million. These funds are unpredictable and, with the exception of the parcel tax which has a specific rate and term, amounts generated vary from year to year.
We are in an economy where our local increases in property tax revenue either closely match or may be outpacing the increases in state revenue through the LCFF. In 2016/17, the District’s increase in property taxes exceeded the revenue entitlement from the state and the District is Basic Aid. Next year, based on current state budget projections, the District will return to a LCFF funding model. The District needs only to exceed the LCFF by $1 to be considered Basic Aid. There are various levels of Basic Aid in this county and SMFCSD is at the tipping point, or entry level. The District is currently straddling the funding line between LCFF and Basic Aid, and will likely be in and out of Basic Aid for the next couple of years. Some key determining factors in the LCFF vs. Basic Aid funding are student enrollment, rate of increase in assessed values of local properties, and the amount of funding the state will contribute to funding LCFF.
Measure Y is a parcel tax and if it does not pass, the District will no longer receive the $7 mil. in annual revenue presently generated from this parcel tax. Loss of this revenue is not replaced by the state as it is local, voter approved funding. Measure A was approved in 2010 and expires in June 2017. Measure Y seeks to renew the expiring Measure A for 9 years.