California Dolphin: statewide California news

Opinion: Piedmont schools, city’s funding disparity unfair

It’s budget season in Piedmont, and over the next month the City Council (first and third Mondays) and school board (first and third Wednesdays) will hold a number of meetings to set their budgets for 2018-2019.
It’s feast or famine for the city and district, the city being well into the black and the district on the brink of red. The tragedy of this situation is that the city’s good fortune is mostly due to spiking housing prices as families with school-age children bid up prices (and therefore city revenue) to get into the school district. The district benefits from increased property values too but not as much as the city and is more dependent on state aid funding formulas not so favorable to districts like Piedmont.
The city continues to experience revenues above projections. For 2017-2018, the city projects a 4.5 percent increase in revenue. Much of that new revenue is applied to new expenditures in 2018-19, with expenditures projected to increase by 8.4 percent. Most of that increase is for salaries and benefits, as the council recently approved a 3 percent pay increase for all city staff. On top of this, the 2018-19 budget proposes to add $400,000 and $850,000 to equipment replacement ($3.3 million ) and facilities maintenance ($3.4 million) and $2 million to a new pension stabilization fund to save up for CalPERS increases. Even with these new expenditures and allocations, the city annual reserve will be $5 million, 20 percent of the General Fund, the maximum allowed by charter. See www.ci.piedmont.ca.us/finance/budget/18-19/overview.pdf  for details
Across Magnolia Avenue, trends for the school district are just the opposite. For the upcoming 2018-19 budget year, total revenue is projected to rise by only 2 percent. And that money is already spent — local school districts are facing state-mandated increases in CalSTRS and CalPERS annual contributions on the order of $1.5 million going forward. In order to maintain a 3 percent reserve for economic uncertainty, the 2018-19 PUSD budget is projected to be $160,000 in the red.  And this is after a year when the teachers went without salary increases.
In a town where community and school are inseparable, why is the city so flush and the district so strapped?  Answer: simple cash flow. Property sales are the biggest source of revenue in town, and the city retains its share while the district has to filter its share through Sacramento. The biggest windfall to the city comes from the transfer tax, the 1.2 percent per $1,000 paid at points of sale, all of which goes to the city. Over the past 10 years, annual transfer tax receipts ranged from $1.7 to $4 million, but the tax now comes in consistently at $3.4 million, even with declining sales numbers. The city budgets for $2.8 million in transfer tax receipts so there is always an end-of-the-year surplus resulting in new allocations by the city. The district gets no share of the transfer tax and relies only on state aid, the school parcel tax and extensive fundraising. The city also gets revenues from state, county and regional measures — the gas tax, the county sales tax, regional park bonds — that bring substantial discretionary funds to the city. Rarely does the district get access to such funds.
So the city and school district are going in opposite directions. Both are great places to raise and educate your kids but just because the city collects the transfer tax, does that mean it should keep it all? Given the run-up in the transfer tax due to new residents coming to Piedmont for the schools, shouldn’t the city and district share the tax? Maybe a subcommittee of council and school board members can meet on Tuesday nights and work something out.
Finally, with PHS graduation next week, it’s a good time to give advice to our graduates, and given the state of national affairs, they need it now more than ever. But what should be said to these young adults who have come of age in possibly the worst period of public discourse in our nation’s history?
I’d point to one of our own, Milo Gaillard, graduating next week from Millennium High School, as an example for others. Two years ago he started a petition (more than 100 signatures) to allow dogs on the lawn at the Dracena Park dog run, a true example of the American way of engaging your fellow citizens to bring about change.
Unfortunately, Milo came up against the “Piedmont way” — a run-around at City Hall and last-minute bait-and-switch. But thanks to Milo, soon there will be an off-leash area on the newly designed lawn area. As the saying goes, you can’t teach old dogs new tricks, and it’s going to take the young ones like Milo to set an example for the rest of us.
Former City Councilman Garrett Keating lives in Piedmont.