BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: AB 267
AUTHOR: Torlakson
AMENDED: May 20, 2009
FISCAL COMM: No HEARING DATE: July 1, 2009
URGENCY: No CONSULTANT: James Wilson
NOTE: This bill has been referred to the Committees on
Education and Revenue and Taxation. A "do pass" motion
should include referral to the Committee on Revenue and
Taxation.
SUBJECT : School finance: local taxes.
SUMMARY
This bill authorizes school districts to form education
finance districts and authorizes education finance
districts, or school districts, to impose qualified special
taxes, as defined, subject to approval by 2/3 vote of the
qualified electors of the district.
BACKGROUND
Prior to 1970, the state's K-12 schools relied largely on
local property taxes levied at different rates and yielding
different amounts per pupil in the more than 1,000 school
districts of the state. State court rulings in the Serrano
v. Priest equalization lawsuit forced the state to revise
basic school finance and established the revenue limit
system that exists today. Revenue limits had the effect of
making the level of local property taxes almost irrelevant
to schools since each additional dollar of property tax
within the revenue limit simply relieved the state of the
obligation to provide that dollar. Similarly, if property
tax revenues declined, the state was obligated to replace
the dollar up to the district's revenue limit. Property
taxes remained relevant to about 100 "basic aid" school
districts who were fortunate enough to receive more
property tax than required by their revenue limits, and all
districts were still able to levy property tax increments
outside of revenue limits, if the override was locally
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approved for a specific purpose. In 1978, Proposition 13
limited both tax rates and assessments thereby
significantly reducing property tax revenues and forcing
the state to replace the lost revenues in district revenue
limits. However, Proposition 13's limit on tax rates ended
the ability of school districts to levy incremental rates.
Since that time, school districts have established some
ability to generate limited local revenues from (non ad
valorem) parcel taxes that must be approved by a 2/3 vote
locally, but most school funding is either received from
the state or federal governments, or controlled by the
state through revenue limits required to equalize per
pupil funding.
ANALYSIS
This bill:
1) Authorizes three or more contiguous school districts,
located within the same county, to establish an
education finance district if the governing body of
each school district adopts a resolution to
participate and enters into a mutual agreement with
the other districts for the division and expenditure
of qualified special tax revenue.
2) Prohibits a school district with at least 70% of its
pupils from lower or very low income households, as
defined in current law, from being denied
participation in an education finance district by the
other districts, provided that the district can meet
the other requirements.
3) Authorizes two school districts, if they are the only
two districts in a county, to establish an education
finance district if the districts governing boards
adopt resolutions to participate and agree on the
division and expenditure of the revenue raised by a
qualified special tax.
4) Authorizes a school district that is the only district
in a county to form an education finance district with
two or more contiguous school districts in adjoining
counties, provided that the district governing boards
adopt resolutions to participate and mutually agree
regarding the division and expenditure of the revenue
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raised by a qualified special tax.
5) Provides that any school district or education finance
district may impose qualified special taxes within the
district provided that the special taxes are approved
by a 2/3 vote of the district's electorate, and
existing special tax procedures are followed.
6) Defines "qualified special taxes" to mean special
taxes that apply uniformly to all taxpayers or all
real property within the school district or education
finance district except that "qualified special taxes"
may include taxes that provide for an exemption from
those taxes for taxpayers 65 years of age or older or
for persons receiving Supplemental Security Income for
a disability, regardless of age.
STAFF COMMENTS
1) Related legislation . This measure is related to ACA
10 (Torlakson) that would, upon approval of a vote of
the people statewide, amend the California
Constitution to lower the constitutional vote
requirement for approval of a special tax to be levied
by an education finance district from two-thirds to a
(50%+1) majority of the district voters.
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2) Previous legislation . SB 1430 (Torlakson) as amended
on April 10, 2008, was identical to this bill. Its
companion measure, SCA 18 (Torlakson) of 2008, would
have reduced the vote threshold for special taxes
levied by an education finance district from
two-thirds to a majority of the electorate. Both SB
1430 and SCA 18 died in the Senate.
3) Why require multiple school districts to form a
finance district . About 55% of California's
districts serve fewer than 2,500 students, and many of
these districts are located in rural areas. Not many
small school districts have attempted to
impose a parcel tax simply because of the costs and
efforts involved in placing a measure on the ballot.
This bill would provide rural school districts with
the possibility of raising revenues by gaining
approval for a single parcel tax within the education
finance district's jurisdiction. It may also allow
small school districts to reduce their operational
costs by using the funds from the tax to create joint
programs.
4) Equalization of local revenues . Requiring multiple
school districts to cooperate in the formation of a
finance district, and further requiring that school
districts with high percentage of poverty pupils be
allowed to join such finance districts, allows the
revenues raised among these districts to be locally
"equalized." This form of local revenue sharing among
districts with populations of differing wealth, called
"power equalization," was once proposed as a possible
means of addressing compliance with the Serrano
decision.
SUPPORT
Small School District Association
California Teacher Association
OPPOSITION
California Taxpayers Association