TAX NEWS - June 2010

San Diego Tax: South Bay school district may seek $96 parcel tax

IMPERIAL BEACH — The South Bay Union School District today will consider asking property owners in November to tax themselves $96 annually in an effort to get a $1.7 million annual boost to its struggling budget.

The district is facing a potential $2.3 million shortfall in its 2010-11 spending plan that begins July 1, even after $1.4 million in federal stimulus funds and the loss of 60 teachers. The district will still need to borrow from its reserves to balance the budget.

At a meeting scheduled for 6 p.m. today, district officials will ask the school board to approve next year's $65 million budget, as well as a resolution to place a parcel tax on the Nov. 2 ballot. The meeting will be held at the district's Education Center, 601 Elm Ave. in Imperial Beach.

"This year, we've had to adjust our spending by more than $8 million," Superintendent Carol Parish said. "I'm really proud of the process but heartbroken about what we had to cut."

Parcel taxes assign a flat fee on property regardless of its value. Unlike bond measures, parcel taxes can be spent on salaries, materials and equipment. Parcel taxes also require approval from two-thirds of those casting ballots, unlike bond measures, which require 55 percent approval.

South Bay officials are proposing a $96 annual tax per parcel that would last four years. Proceeds would be spent only on teachers and some services, Parish said.

Los Angeles voters rejected a $100-per-year parcel tax this month. Similar proposals also were recently defeated in Long Beach and Pasadena. Last year, discussion of a plan to charge Cardiff property owners a flat tax was withdrawn after the public made it clear they did not support the idea. The San Diego Unified School District is considering putting a measure of its own on the November ballot.

Parish said a telephone survey found support for a parcel tax at 62 percent. Still, she believes the district is "very close" to having the support it needs.

"I think we're right on," said Parish, who added that the survey also found that voters were more likely to support a parcel tax if it were under $100 and lasted only four years.

The district has about 8,000 students in preschool through sixth grade on 12 campuses. Its schools draw students from Imperial Beach and the south San Diego communities of Nestor, Otay Mesa and San Ysidro. Parish said the district, which has made significant academic achievements in recent years, has cut up to $2 million every year from its budget since 2002.

Teachers next year will take seven furlough days, representing a 3.75 percent reduction in salaries. and all employees have agreed to pay into their health care plans beginning in 2011. Additionally, Parish said class sizes will increase in kindergarten through third grade, a move that could prompt the state to penalize the district.

It could be worse next year. With no more federal stimulus funds, Parish said the district is facing $5 million in cuts for the 2011-12 fiscal year.

"Nobody wants to ask people for money, but it's something we believe in," Parish said.

Voters agreed in 2008 to a $59.4 million bond measure for repairs to district schools. Work began this month. The measure passed with about 75 percent of the vote.