Q&A: Parcel tax for L.A. schools is latest ask of taxpayers

On Tuesday, voters living within the boundaries of the Los Angeles Unified School District will decide whether to pass Measure EE, a property tax to benefit Los Angeles public schools. The campaign came together quickly — with supporters hoping to build on the goodwill generated by teachers during their six-day strike in January.

The revenue also would help the district keep commitments made at that time to hire more teachers, nurses, counselors and librarians.

Low turnout is anticipated given that the tax measure will be the only item on the ballot for most district residents.

The rapid-turnaround campaign, with competing messages from supporters and opponents, and details of the measure have led to confusion about what the proposal would do.

Here is a primer for voters and others with a stake in the nation’s second-largest school system.

What are the basics?

If two-thirds of voters say yes, Measure EE would impose an annual tax of 16 cents per square foot of indoor space — excluding parking areas — on residential and commercial property. This parcel tax differs from other kinds of property taxes because it is not linked to the value of a property. It also differs from many other parcel taxes in that it is not a flat fee per parcel.

The levy would be in effect for 12 years and would raise an estimated $500 million annually. It could pay for virtually any aspect of district operations, but the goal would be to improve school services and staffing. The school district spends about $13.7 billion a year.

Who or what would be exempt from the tax?

The tax applies only to property owners. However, renters could be affected if property owners attempt to pass on increased costs.

Property owners who are 65 or older could apply for an exemption, as could those who depend on government disability income.

The fee per square foot does not apply to open land or to enclosed parking areas, such as home garages or parking structures, according to district officials.

What is the effect on commercial property owners or businesses?

Many commercial property owners oppose the tax because it will be based on the size of their holdings. The L.A. Area Chamber of Commerce said the tax would place too heavy a burden for supporting schools on owners of multistory office buildings, large apartment complexes or shopping centers, among others.

Officials including Los Angeles Mayor Eric Garcetti and L.A. schools Supt. Austin Beutner defended the tax’s square-foot formula, calling it more equitable for lower-income households than a flat tax per parcel, as some other school systems have done. And some business leaders sided with them.

Under Measure EE, a property owner with an 1,100-square-foot home would pay $176 a year, the Beverly Center’s owners would pay $205,545, and the owners of Dodger Stadium would pay $130,567. Based on their 2018 tax bills, for example, the parcel tax would result in a 3% property tax increase for the Beverly Center and about 4% for Dodger Stadium.

Would all the money go to the classroom?

Not necessarily. The money goes to the district’s general operating budget — standard procedure for parcel taxes.

So the money could go, for example, toward health benefits or pensions, commitments that the district must fund from somewhere and that threaten the long-term solvency of the school system. Without Measure EE, these obligations could pull money from classroom needs. Even with EE, additional funding is likely to be needed to prevent serious future cutbacks.

Will charter schools benefit?

Charter schools, which are publicly funded but privately managed, enroll close to 1 in 5 public school students within L.A. Unified, and they expect to receive a proportional share of the proceeds. Expect them to sue if they don’t.

In the end, charters could be the greatest beneficiaries of the tax. That’s because the district may have to use its share of money to offset such expenses as retiree health benefits and other “legacy” costs.

Unburdened by such commitments, charter operators may be able to apply more money directly to lowering class sizes and student services, possibly making it more challenging for district-run schools to compete for students.

Is the school system underfunded?

It is significantly less well-funded — per student — compared with some other urban school systems.

State and federal sources add up to about $24,000 per student in New York City, which has the nation’s largest school district, and about $16,000 per student in Los Angeles.

The L.A. number increases substantially if you throw in resources for school lunches or school construction, but the New York-L.A. ratio is accepted by many as an apples-to-apples comparison.

L.A. Unified students have needs that are expensive to address. Many live in low-income, high-crime areas. Many are recent immigrants with limited English-speaking skills. Thousands are homeless or in foster care.

Who supports and who opposes Measure EE?

Labor unions connected to L.A. Unified are among the biggest funders of the Yes on EE campaign. Local business and philanthropic leaders in support include Clippers owner Steve Ballmer and Eli Broad, a major charter school supporter who said the funding would help all public schools. Garcetti has put his political weight behind the measure.

Opponents include major business associations, such as BizFed and the Valley Industry and Commerce Assn. Real estate interests have been opposed as have taxpayer associations, which typically oppose tax increases.

The Howard Jarvis Taxpayers Assn. has sued over last-minute wording changes to the measure. The group says L.A. Unified improperly altered the ballot language to try to expand the scope of the tax measure. The district has denied wrongdoing. The issue will go to court after the election. Opponents also assert that district officials must become better stewards of public funds before being trusted with a new tax windfall.