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02/16/94

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Kirst advocates local school district surtaxes at 'Education Summit'

STANFORD -- Local school district surtaxes might be the best way out of the state's current education funding crisis, education Professor Michael Kirst told the annual California Education Summit in San Francisco Wednesday, Feb. 16.

Without it or a similar measure, Kirst said, "There is no short- or long-term solution in sight for the public schools. The outlook is for continued slow deterioration."

Kirst, co-director of Policy Analysis for California Education (PACE), addressed members of the California state legislature, the governor and state constitutional officers, as well as recognized education, business, community and political leaders from across the nation during the two-day forum on California's public schools. The summit was convened by Assembly Speaker Willie L. Brown Jr.

"In 1965, California per pupil operating expenditures were sixth in the U.S. and by 1994, it was 41st," Kirst said. "The 1995 budget will drop California even lower."

He noted that California was unusual in that 88 percent of its school funding comes from the state, the highest percentage of any state except Hawaii.

Proposition 98, passed in 1989, only earmarks a certain percentage of the state budget for schools, said Kirst.

"It has not kept California schools even with inflation and is no long-term solution to the funding crisis," Kirst said. "Since school enrollment grows by about 100,000 pupils each year (or 300 per day), and the state's economy is growing very slowly, there is not enough growth in the state budget to make Prop. 98 effective."

Kirst offered three solutions:

  • Amend Proposition 13 by a statewide referendum to restore local property tax flexibility;
  • Use county-level sales taxes that are now authorized by the state, if a majority of voters agree;
  • Authorize through state law a majority vote local school district surtax on the state income tax.

Kirst described the third option as "the most feasible and least discussed."

In 1978, Proposition 13 capped local property taxes for school operating expenditures, and virtually all school districts are at their maximum property tax rate based on value of property, said Kirst. Local districts can levy parcel taxes that assess each landowner the same amount of tax, regardless of the value of the property, with the approval of two-thirds of voters.

(Governor Wilson just vetoed a measure that would have allowed local communities to levy parcel taxes with a majority vote.)

Voters could amend Proposition 13 to raise the property tax cap, but this is unlikely to happen in the near future, said Kirst, who is a former president of the California State Board of Education.

Kirst also noted that county-wide sales taxes are difficult to pass. Moreover, he added, the state may be increasing some form of sales tax to pay for the Los Angeles earthquake.

"This leaves an equalized local income tax as a more feasible option," Kirst said. "Other states like Kentucky, Ohio, Pennsylvania and Maryland use a local income tax for schools."

Under Kirst's plan, the state would collect the tax and rebate it to the district. The state would guarantee an equal income tax yield for equal tax effort.

"For example, a one-half percent local income tax increase would yield the same amount per pupil for any district in the state so that wealthy and poor communities would have the same revenue-raising capacity," Kirst said.

Kirst added that a simple majority should approve the tax, since "there is no reason that a 'no' vote should be twice as consequential as a 'yes' vote."

"The alternative to local sources of funding is an annual replay of this year's budget," said Kirst. "Excessive state control of school finance was not something the voters wanted when they passed Proposition 13. The easiest way to end this deadlock, without changing Proposition 13, is through a new, voter-approved local funding source."

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