The public school spring gala season is upon us, an annual ritual in which Berkeley parents get to shell out for a bunch of stuff we don’t want in order to bail out our kids’ cash-strapped schools. But there’s a better to raise money for public schools: tax reform.
California voters will soon have a chance to rectify one of the biggest blunders ever to plague the Golden State: Prop 13. Passed in 1978, Prop 13 froze property taxes for homeowners and businesses by assessing real estate at 1975 valuations in perpetuity.
Proponents claimed that the purpose of the law was to protect grandma from getting priced out of her home by soaring property taxes, but the biggest beneficiaries were, and still are, corporations. Opponents predicted that the loss of property tax revenue would cripple local governments’ ability to provide basic services such as schools, parks, fire protection and libraries. They were right.
Prior to the passage of Prop 13, California ranked among the top states for education spending and achievement. Spending dropped precipitously beginning in the 1980s and, today, with school spending at a 40-year low, we rank 49th in per-pupil spending.
Cash-starved municipalities have had to hike sales taxes in order to maintain a bare minimum of critical services. And, as any Berkeley parent knows, PTAs have scrambled valiantly to raise money for basic classroom supplies as well as school art, music, gardening and after-school programs. Thanks to Prop 13, our schools must rely on the energy and generosity of families, community members and private foundations.
There’s a lot to hate here, but nothing is more galling than the fact that corporations are the primary beneficiaries of Prop 13. Homes are reassessed at current values when ownership changes hands, but loopholes allow commercial property owners to skirt this provision, forever avoiding reassessment.
Statewide, homeowners pay 72% of all property taxes while corporations pay only 28%. Chevron, for example, saves $1 billion a year courtesy of Prop 13 corporate favoritism. And Disneyland pays five cents per square foot, whereas the average California homeowner pays 40 cents.
But don’t fret… after 35 years, Sleeping Beauty is about to get a wake-up call. Momentum is building for a 2016 ballot initiative that would force commercial property owners to pay taxes on the basis of the actual current value of their property. The Prop 13 property tax freeze would still apply to homeowners and small businesses.
These reforms would generate $6 billion a year in revenue, at least $2.5 billion of which must go to schools under the Prop 98 spending formula. That’s $240,000 a year for each of the 10,000-plus K-12 public schools in California.
What would your child’s school do with $240,000?
At your school’s next silent auction, be sure to post this Prop 13 reform petition. Maybe by 2017, we can cancel the spring galas. Sleeping Beauty owes us.
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