BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Norma J. Torres, Chair
BILL NO: SCA 3 HEARING DATE: 6/18/13
AUTHOR: LENO ANALYSIS BY: Darren Chesin
AMENDED: 5/21/13
FISCAL: NO
SUBJECT
Taxation: educational entities; parcel tax
DESCRIPTION
Existing law , pursuant to the California Constitution states
that taxes levied by local governments are either general taxes,
subject to majority approval of its voters, or special taxes,
subject to 2/3 vote (Article XIII C). Proposition 13 of 1978
required a 2/3 vote of each house of the Legislature for state
tax increases, and 2/3 vote of local voters for local special
taxes. Proposition 62 of 1986 prohibited local agencies from
imposing general taxes without majority approval of local
voters, and a 2/3 vote for special taxes. Proposition 218 of
1996 extended those vote thresholds to charter cities, and
limited local agencies' powers to levy new assessments, fees,
and taxes. Local agencies generally propose to increase taxes
by adopting an ordinance or a resolution at a public hearing.
The Constitution further bars school districts from imposing
general taxes, but allows school districts, community college
districts, and county offices of education to issue bonded
indebtedness for school facilities with 55% approval
(Proposition 39 of 2000).
Existing law additionally allows school districts and community
college districts to levy qualified special taxes that are
uniform as applied to all taxpayers with 2/3 vote of the
electorate; however, school districts may exempt persons over
the age of 65 or those receiving Supplemental Security Income
(SSI) or Social Security Disability Income (SSDI) from the tax.
County offices of education have no direct taxing authority, but
receive a share of the property tax, and counties may fund
programs delivered by the education offices. The district may
implement these taxes, for as long as it wants, spend the
proceeds for any purpose, and apply any tax rate it chooses. To
date, local agencies have only assessed parcel taxes under this
section.
This constitutional amendment would authorize school districts,
community college districts, and county offices of education to
impose a parcel tax on real property by a 55% vote of the voters
in the district or county under specified circumstances,
including:
The district governing board approves the proposition by
majority vote.
The ballot proposition contains a specific list of programs
and purposes to be funded, and a requirement that funds be
spent solely for those programs and purposes.
The ballot proposition includes a requirement for annual
independent audit of the amount of tax proceeds collected and
expended and the specified purposes and programs funded.
The ballot proposition requires the governing board to create
a citizens' oversight committee to review all expenditures of
proceeds and financial audits, and report its findings to the
governing board and the public.
The ballot proposition allows for an exemption from the tax
for parcels owned by persons receiving SSI or SSDI, as
specified.
This constitutional amendment requires the governing board of
the school or community college district or county office of
education to set a maximum amount of tax imposed, increased, or
extended, and to adjust that maximum amount for inflation
according to the California Consumer Price Index published by
the Department of Industrial Relations.
This constitutional amendment also defines "parcel tax" as a
special tax imposed upon real property at a rate determined
without regard to the property's value, provides that tax
proceeds may not be used to fund administrative salaries, and
makes other clarifying and conforming changes to the
Constitution.
BACKGROUND
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Majorities and Super Majorities . Majority rule is a two-edged
sword: democratically elected governments are supposed to enact
policies that the voters want, but both federal and state
systems of government restrict the majority's ability to oppress
a minority interests. For the great majority of public issues,
fifty-percent plus one of a legislative body or an electorate
rule. But for some issues, the United States and California
Constitutions provide that a majority is not enough and a higher
threshold is necessary, such as amending the U.S. Constitution,
removing a president from office, ratifying a treaty, or
overriding a veto.
States largely import the 2/3 vote from the U.S. Constitution
into their own for those same purposes, but also require 2/3
vote on taxes or other measures. In a series of voter
initiatives, Californians have elevated local special tax
increases and legislatively enacted state tax increases to this
level, while almost every other change to the law can be enacted
by majority vote; local agencies can enact general taxes, and
voters can approve tax initiatives increasing state taxes by
majority vote, as they did with Proposition 30 of 2012. As
such, local agencies need a majority vote to assess taxes and
spend the proceeds on whatever purposes they want to, but 2/3 if
they restrict the use of the tax proceeds. Supermajorities of
the Legislature are necessary to increase taxes, but only
majorities of voters can.
Parcel Taxes . California allows school districts to levy parcel
taxes, which are different in many ways from property taxes and
general obligation bonds. First, parcel taxes are not ad
valorem, or assessed based on the value of a property; instead
they are a flat rate assessed per parcel or per square foot,
regardless of its size. Essentially, parcel taxes are a flat
tax on property ownership. While they require a 2/3 vote,
proceeds are not limited to certain uses; revenues may be used
for ongoing expenses, programs, or buildings at the local
agency's discretion, although parcel taxes imposed at a lower
voter approval rate under this measure cannot be used for
administrative salaries, among other restrictions.
Parcel taxes are flexible ways of raising revenues at the local
level, but are subject to certain requirements. Parcel tax
elections must be held on "established election dates", which
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means in March, April, or November of an even-numbered year, or
March, June, or November in an odd-numbered year. Parcel taxes
do not have a cap; parcel tax proposals voted on in the last ten
years varied from $26 per parcel to $765 per parcel, with terms
as short as two years, and some being permanent.
According to EdSource, between 1983 through November, 2012,
voters approved 322 parcel taxes in 584 elections, with more
than 90% of proposals receiving at least a majority vote from
the electorate during that time. However, in the last two
elections, voters have indicated an increased willingness to
approve the tax at the current vote threshold: in 2011, 18 out
of 27 districts approved the tax, plus 27 out of 41 in 2012.
Most districts levying parcel taxes are economically better off:
as of 2010, the median district levying a parcel tax had about
3,180 students of whom 15% qualified for free/reduced-price
meals and 9% were English learners. EdSource also indicated
that the districts that had successful elections generally serve
fewer low-income students than the typical California school
district. They are also disproportionately small, with 66 (80%)
of them serving fewer than 10,000 students.
EdSource includes the following table showing the variety of
rates, terms, and election results for parcel tax elections in
November, 2012:
--------------------------------------------------------------------------------------------------------
|County |District/Measure |Amount |Passed (2/3 needed) |% Yes vote |
--------------------------------------------------------------------------------------------------------
|------------+-------------+------------+-------+-------|
|Alameda |San Leandro |$39/yr for |No |65.6% |
| |Unified/L |5 yr (new) | | |
|------------+-------------+------------+-------+-------|
|Contra |Martinez |$50/yr for |Yes |67.7% |
|Costa |Unified/C |5 yr | | |
| | |(extension) | | |
|------------+-------------+------------+-------+-------|
|Contra |West Contra |7.2 cents |Yes |74.7% |
|Costa |Costa |sq. ft for | | |
| |Unified/G |5 yr | | |
| | |(extension) | | |
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|------------+-------------+------------+-------+-------|
|Humboldt |Arcata |$49/yr for |Yes |77.3% |
| |Elementary/E |5 yr (new) | | |
|------------+-------------+------------+-------+-------|
|Kern |Mojave |$42/yr for |No |50.4% |
| |Unified/N |5 yr (new) | | |
|------------+-------------+------------+-------+-------|
|Los Angeles |Local |2 cents/sq. |Yes |69.5% |
| |Classrooms |ft | | |
| |Funding |(residential| | |
| |Authority CL |); 7.5 | | |
| |(4 |cents/sq. | | |
| |elementary |ft (other | | |
| |districts + |property) | | |
| |Centinela |for 12 yr | | |
| |Union High) |(new) | | |
|------------+-------------+------------+-------+-------|
|Los Angeles |Little Lake |$48/yr for |Yes |74.1% |
| |City |5 yr (new) | | |
| |Unified/TT | | | |
|------------+-------------+------------+-------+-------|
|Los Angeles |Westside |$96/yr for |No |53.6% |
| |Union School |4 yr (new) | | |
| |District/WP | | | |
|------------+-------------+------------+-------+-------|
|Marin |Mill Valley |$196 yr/8 |Yes |70.4% |
| |Schools/B |yr (in | | |
| | |addition to | | |
| | |a $731 tax | | |
| | |through | | |
| | |2018 that | | |
| | |increases | | |
| | |5% a yr) | | |
|------------+-------------+------------+-------+-------|
|Marin/Sonoma|Shoreline |$184.70/yr |Yes |71.5% |
| |Unified/C |for 8 yr | |(Marin:|
| | |(extension) | | |
| | | | |76.8%; |
| | | | |Sonoma:|
| | | | | |
| | | | |63.2%) |
|------------+-------------+------------+-------+-------|
|Monterey |Pacific |$65/yr for |No |65.1% |
| |Grove |5 yr | | |
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| |Unified/A |(extension) | | |
|------------+-------------+------------+-------+-------|
|Nevada |Pleasant |$92/yr |No |36.7% |
| |Ridge |(new) | | |
| |Union/K | | | |
|------------+-------------+------------+-------+-------|
|San Mateo |San Bruno |$199/yr for |No |58.5% |
| |Park School |5 yr (new) | | |
| |District/G | | | |
|------------+-------------+------------+-------+-------|
|Santa |Santa |$48/yr for |Yes |68.6% |
|Barbara |Barbara |4 yr | | |
| |Unified |(continuatio| | |
| |(high |n) | | |
| |school)/A | | | |
|------------+-------------+------------+-------+-------|
|Santa |Santa |$45/yr for |Yes |69.6% |
|Barbara |Barbara |4 yr | | |
| |Unified |(continuatio| | |
| |(elementary)/|n) | | |
| |B | | | |
|------------+-------------+------------+-------+-------|
|Santa Clara |Berryessa |$79/yr for |Yes |77.3% |
| |Union |8 yr | | |
| |Schools/K |(continuatio| | |
| | |n) | | |
|------------+-------------+------------+-------+-------|
|Sonoma |Fort Ross |$48/yr for |No |65.4% |
| |Elementary/L |8 yr | | |
| | |(renewal) | | |
|------------+-------------+------------+-------+-------|
|Sonoma |Sebastopol |$76/yr for |Yes |71.4% |
| |Union/O |8 yr | | |
| | |(renewal) | | |
|------------+-------------+------------+-------+-------|
|Sonoma |West Sonoma |$48/yr for |Yes |72.3% |
| |County |8 yr | | |
| |Union/K |(renewal) | | |
|------------+-------------+------------+-------+-------|
|Tulare |Three Rivers |$60/yr |No |61.6% |
| |School |(new) | | |
| |District/I | | | |
|------------+-------------+------------+-------+-------|
|Ventura |Ventura |$59/yr for |Yes |67.1% |
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| |Unified/Q |4 yr (new; | | |
| | |voters | | |
| | |rejected | | |
| | |$96/yr in | | |
| | |2010) | | |
|------------+-------------+------------+-------+-------|
|Yolo |Davis Joint |$204/yr for |Yes |68.9% |
| |Unified/E |4 yr | | |
| | |(renewal | | |
| | |plus $242 | | |
| | |more; | | |
| | |contingent | | |
| | |on Prop 30 | | |
| | |failing) | | |
-------------------------------------------------------
COMMENTS
1.According to the author : SCA 3 provides parents, teachers and
school districts with more local control and much-needed
flexibility in raising local education funding. The measure
would allow communities to augment the resources available for
direct education and support programs, and increase
accountability. The current 2/3rds vote requirement for
passage of a local parcel tax allows a relatively small
minority of voters to block a local education funding proposal
that may have the support of more than a majority of voters.
This measure would allow a supermajority of 55% of local
voters to approve a local parcel tax for educational purposes.
This measure would allow local educational leaders to solicit
community support for additional revenue to help fund local
educational priorities. SCA 3 gives local voters a voice in
setting priorities and will hold district and county officials
directly accountable for the use of the funds. California
voters have consistently designated education as a chief
priority in recent years. In 2000, voters approved an
initiative lowering to 55% the threshold for passing education
capital facilities bonds. SCA 3 conforms the vote threshold
for parcel taxes to the same level.
2.First time for everything . SCA 3 gives the power to enact
parcel taxes to County Offices of Education, which currently
enjoy no taxing powers. School districts, community college
districts, and other specified special districts may enact
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these taxes by statute, but never before has the Legislature
allowed the powers to tax this branch of county government.
If SCA 3 is enacted, the Legislature may need to specify
statutory procedures for County Offices of Education to levy
parcel taxes.
3.Who pays ? SCA 3 lowers the vote threshold to enact parcel
taxes, which landowners who own property in the jurisdiction
imposing the tax must pay. Therefore, resident
non-landowners, like renters, can vote in the election, but do
not pay the tax, except to the extent that property owners can
pass them on in rents which depends on supply and demand of
housing in a given area. In the reverse, non-resident
landowners are not able to vote in the election, but must pay
the tax if voters approve the measure. In addition, districts
may exempt taxpayers 65 years or older or who receive SSI
income, thereby creating another class of voters who do not
bear the incidence of the tax. Is it equitable to lower the
vote threshold for new parcel taxes when many voters do not
bear the cost, and those who may bear the cost cannot vote?
4.If at first you don't succeed . SCA 3 is substantially similar
to SCA 5 (Simitian, 2011), SCA 6 (Simitian, 2009), SCA 17
(Simitian, 2008), SCA 8 (Simitian, 2005), and ACA 4 (Simitian,
2003), none of which were enacted.
5.Related Legislation . SCA 4 (Liu), which is pending in the
Senate Committee on Transportation and Housing, allows local
agencies to levy, extend, or increase special taxes by a 55%
vote for local transportation projects. SCA 7 (Wolk) which is
also on today's agenda authorizes cities, counties, or special
districts to impose a special tax by a 55% vote of the voters
and to issue bonded indebtedness to construct, reconstruct,
rehabilitate, or replace public libraries. SCA 8 (Corbett),
which is also pending in the Senate Committee on
Transportation and Housing, allows local agencies to levy,
extend, or increase special taxes by a 55% vote for local
transportation projects. SCA 9 (Corbett) which is also on
today's agenda allows local agencies to levy, extend, or
increase special taxes by a 55% vote for community and
economic development projects. SCA 11 (Hancock), which is
also on today's agenda allows local agencies to levy, extend,
or increase special taxes by a 55% vote for any purpose.
SCA 3 (LENO)
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PRIOR ACTION
Senate Governance and Finance Committee:5-2
POSITIONS
Sponsor: California Federation of Teachers
California Superintendent of Public Instruction Tom
Torlakson
California School Boards Association
California School Employees Association
Support: Association of California School Administrators
Bayshore School District
Berkeley City Council
Brisbane School District
Burlingame Elementary School District
Cabrillo Unified School District
California Association of Suburban School Districts
California Catholic Conference
California Coalition for Adequate School Housing
California County Superintendents Educational Services
Association
California Federation of Teachers
California Labor Federation
County School Facilities Consortium;
Fairfield-Suisun Unified School District
Fremont Unified School District
Governing Board of the Tamalpais Union High School
District
Hughes-Elizabeth Lakes Union Elementary School
District
Jefferson Unified High School District;
Los Altos School District
Los Angeles Community College District
Los Angeles Unified School District
Los Rios Community College District
Marin County School Districts
Mountain View Whisman School District
Orinda Union School District, Member, Sarah Butler
Pacifica School District
Palo Alto Unified School District
Portola Valley School District
Public Advocates
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Redwood City School District
Redwood City School District
Rio Hondo Community College District
Riverside County Superintendents of Schools
San Bruno Park School District
San Carlos School District
San Diego Community College District
San Diego Unified School District
San Mateo County Board of Education
San Mateo County Superintendent of Schools
San Mateo-Foster City School District
San Francisco Unified School District
Sequoia Union High School District
Silicon Valley Leadership Group
Small School Districts' Association
Torrance Unified School District
South San Francisco Unified School District
Sunnyvale School District
Woodside Elementary School District
42 individuals
Oppose: Apartment Association of Greater Los Angeles
Apartment Association of Orange County
Apartment Association, California Southern Cities
Associated Builders and Contractors of California
Association of California Life, Health, and Insurance
Companies
California Ambulance Association
California Apartment Association
California Asian Pacific Chamber of Commerce
California Association of Realtors
California Business Properties Association
California Chamber of Commerce
California Charter Schools Association Advocates
California Grocers Association
California Manufacturers & Technology Association
California Restaurant Association
California Retailers Association
East Bay Rental Housing Association
Howard Jarvis Taxpayers Association
National Federation of Independent Business
Nor Cal Rental Property Association
Orange County Association of REALTORS
Orange County Business Council
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San Diego County Apartment Association
San Diego County Taxpayers Association
Santa Barbara Rental Property Association
State Board of Equalization, Member, George
Runner
Western Manufactured Housing Communities Association
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