BILL ANALYSIS
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THIRD READING
Bill No: SCA 6
Author: Simitian (D), et al
Amended: 7/15/10
Vote: 27
SENATE REVENUE & TAXATION COMMITTEE : 5-3, 5/13/09
AYES: Wolk, Alquist, Florez, Padilla, Wiggins
NOES: Walters, Ashburn, Runner
SENATE ELEC., REAP. & CONST. AMEND. COMM. : 3-1, 6/11/09
AYES: Hancock, DeSaulnier, Liu
NOES: Strickland
NO VOTE RECORDED: Walters
SUBJECT : Taxation: educational entities: parcel tax
SOURCE : Author
DIGEST : This constitutional amendment lowers from
two-thirds to 55 percent the threshold of voter approval
necessary for school districts to enact parcel taxes.
Senate Floor Amendments of 7/15/10 clarify procedures for
school districts to enact parcel taxes at lower vote
thresholds.
ANALYSIS : Existing law, under 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 two-thirds vote.
CONTINUED
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2
Proposition 13 (1978) required two-thirds vote of each
house of the Legislature for state tax increases, and
two-thirds vote of local voters for local special taxes.
Proposition 62 (1986) prohibited local agencies from
imposing general taxes without majority approval of local
voters and two-thirds vote for special taxes. Proposition
218 (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 percent approval [Proposition
39 (2000)].
Existing law allows a school district to levy a special tax
that is uniform as applied to all taxpayers, except the
district may exempt persons over the age of 65, with
two-thirds vote of the electorate. The district may
implement the tax for as long as it wants, spend the
proceeds for any purpose, and apply any tax rate it
chooses. Local agencies have only assessed parcel taxes
under this section.
This constitutional amendment authorizes school districts,
community college districts, or county offices of education
to impose a parcel tax on real property by a 55 percent
vote of the voters in the district or county.
This constitutional amendment defines "parcel tax" as a
special tax imposed upon real property at a rate determined
without regard to the property's value. This
constitutional amendment also makes technical changes to
the Constitution.
This constitutional amendment further specifies that the
governing board of the school districts, community college
districts, or county offices of education must approve the
proposition by two-thirds vote.
It further provides that the proposition must contain:
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1. A list of the specific purposes and programs to be
funded.
2. A requirement that the proceeds be used only for the
purposes and programs specified in the proposition, and
not for any other purpose.
3. A requirement that the governing board of the school
district, community college district, or county office
of education conduct an annual financial audit of the
amount of parcel tax proceeds collected and expended,
and the specified purpose and programs funded.
4. A requirement that the governing board of the school
district, community college district, or county office
of education establish a citizens' oversight committee
to review all expenditures of proceeds and financial
audits and report its findings to the governing board.
It requires the proposition to allow an exemption for
individuals over the age of 65 or any individual receiving
Supplemental Security Income for a disability.
It caps the total amount of parcel tax impositions,
increases, or extensions submitted to voters for approval
at any election by a school district, community college
district, or county office of education at $250 per parcel
each year. This amount shall be adjusted annually, from
June to June of each year, for inflation as measured by the
United States city average of the Consumer Price Index for
all Urban Consumers, as published by the United States
Bureau of Labor Statistics, or its successor.
It bars parcel tax proceeds from being used to pay salaries
of any administrator of the school district, community
college district, or county office of education.
Lastly, it provides that SCA 6's changes to the
Constitution shall not affect any existing authority for
school districts, community college districts, or county
offices of education to levy parcel taxes under existing
voting thresholds.
Background
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4
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 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.
According to EdSource, between 1983 and 2006, voters
approved 211 of 414 parcel tax elections, with another 166
reaching majority vote but falling short of the required
two-thirds. One in five California school districts have
tried to enact a parcel tax. Parcel tax proposals voted on
in 2003 varied from $30 per parcel to $385 per parcel, with
terms as short as two years, and some being permanent. All
property must be taxed, except that a district may exclude
individuals 65 years old and older from paying the tax.
School districts in some areas of the state seek to levy
parcel taxes more so than other areas.
Parcel taxes 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,
regardless of its size. Essentially, parcel taxes are a
flat tax on property ownership. Secondly, the proceeds of
general obligation bonds must be spent on the acquisition
and improvement of property, or on school construction.
Parcel taxes give the imposing authority considerably more
flexibility to spend as they see fit. Revenues may be
used for ongoing expenses, programs, or buildings at the
local agency's discretion.
Special taxes such as parcel taxes are subject to
additional accountability. Local agencies must (1) issue a
statement indicating the specific purpose of the tax and a
requirement that the proceeds be used only for that
purpose, (2) create an account in which to deposit
proceeds, and (3) issue an annual report that includes the
amount of funds collected and expended, along with the
status of any project required or authorized by the tax
measure.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
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SUPPORT : (Verified 8/2/10)
Alhambra Unified School District
Alvord Unified School District
Antioch Unified School District
Arcadia Unified School District
Association of California School Administrators
Association of Low Wealth Schools
Bellevue Union School District
Belmont-Redwood Shores School District
Brisbane School District
Buena Park School District
Burlingame School District
Cabrillo College Unified School District
Calaveras Unified School District
California Association of School Business Officials
California Association of Suburban School Districts
California Communities United Institute
California Community College League
California County Boards of Education
California Federation of Teachers
California School Boards Association
California School Employees' Association, AFL-CIO
California State PTA
California Tax Reform Association
California Taxpayers' Association
California Teachers Association
Cambrian School District
Campbell Union High School District
Campbell Union School District
Castro Valley Unified School District
Charter Oaks Unified School District
Children Now
Community College League
Cupertino Union High School District
Davis Joint Unified School District
Dunsmuir Joint Unified School District
Emery Unified School District
Eureka Union School District
Evergreen School District
FIRST 5 Santa Clara County
Fountain Valley School District
Fremont Union High School District
Hayward Unified School District
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6
Healdsburg Unified School District
Hollister School District
Hueneme Elementary School District
Irvine Unified School District
Jefferson Elementary School District
Junction Elementary School District
Kentfield School District
Lakeport Unified School District
Las Lomitas Elementary School District
Lawndale Elementary School District
League of Women Voters of California
Little Lake City School District
Long Beach City College
Los Altos School District
Los Angeles Unified School District
Los Gatos - Saratoga Joint Union High School District
Manhattan Beach Unified School District
Menifee Union School District
Metropolitan School District
Mill Valley School District
Milpitas Unified School District
Moreland School District
Morgan Hill Unified School District
Mountain View Whisman School District
Mountain View-Los Altos Union High School District
Newport - Mesa Unified School District
Nuview Union School District
Oak Grove Unified School District
Palm Springs Unified School District
Palo Alto Unified School District
Pittsburg Unified School District
Poway Unified School District
Ravenswood City School District
Riverside County Schools Advocacy Association
San Carlos School District
San Diego Unified School District
San Francisco Unified School District
San Lorenzo Unified School District
San Luis Obispo County Board of Education
San Mateo - Foster City School District
San Mateo County Board of Education
San Rafael City Schools
San Ramon Unified School District
Santa Barbara County Education Office
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Santa Clara County Office of Education
Santa Monica Malibu Schools
Saratoga Unified School District
Scotts Valley Unified School District
Sequoia Union High School District
Sequoia Union High School District
Silicon Valley Leadership Group
Silver Fork Elementary School District
Sulphur Springs School District
Superintendent of Public Instruction
Tamalpais Union High School District
Temecula Valley Unified School District
Union School District
Valley Home Joint School District
Victor Elementary School District
West Contra Costa Unified School District
OPPOSITION : (Verified 8/2/10)
California Association of Realtors
California Taxpayers' Association
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author:
"SCA 6 would allow local school districts, community
college districts, and county offices of education to
approve a local parcel tax with a 55 percent vote by the
public, rather than the two-thirds majority currently
required. California voters have consistently designated
education as a chief priority, and in 2000 passed an
initiative lowering to 55 percent the threshold for
passing education facilities bonds; this measure conforms
the parcel tax threshold to that same level. SCA 6 does
not raise taxes; it simply provides for local choice and
control. The measure would remedy several conditions
faced by educational institutions:
"Current state budget practices under-fund educational
programs in relation to the resources needed to achieve
the state's education goals for students. This measure
would enhance access to a revenue source that would allow
local communities to augment the resources available for
direct education and support programs.
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"The current two-thirds requirement allows a small
minority of voters to prevent a community from having the
kind of school system that a sizable majority of the
community envisions. There are numerous historic
instances of local parcel taxes failing the two-thirds
requirement despite having support from more than 55
percent of the voters. In the past twenty or so years,
68 percent of the local parcel tax elections that failed
received at least a 55 percent vote.
"Current state budget practices undermine local control
and distance the electorate from their education leaders,
since those leaders have little influence over how
resources are spent. Significant portions of education
funding are earmarked for specific purposes, with little
spending discretion remaining for local boards. This
measure would allow educational leaders to solicit
community support for dedicated revenue to apply to
specified priorities; if local voters support that
agenda, they subsequently can hold district or county
officials directly accountable for using the resources as
intended and for expected results."
ARGUMENTS IN OPPOSITION : The California Association of
Realtors opposes this constitutional amendment because
"parcel taxes are not limited to faulty construction, can
be imposed indefinitely, and are a 'flat' fee parcel tax
that may place an additional burden on homeowners least
able to afford it."
DLW:mw 8/2/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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