In August the school board, in the wake of the Borikas v. Alameda Unified School District decision, decided to preemptively and unilaterally make major changes to the parcel tax.
According to a statement from Superintendent Roberson in August, “The District desires to implement Measure E in accordance with the intent of the voters and consistent with current legal requirements. As a result, the District has decided to implement Measure E in a way that is consistent with Borikas by levying one uniform rate for all parcels of taxable real property.”
“The District is being proactive in implementing Measure E in accordance with the intent of the Davis school district voters and the recent legal requirements imposed by the Borikas decision,” board President Sheila Allen told the Vanguard in August.
On Thursday night, Board President Sheila Allen read a press release indicating that the board had reach a settlement agreement with plaintiff Jose Granda, among others.
“The DJUSD Board voted unanimously to settle the Measure E parcel tax lawsuit. This settlement results in the validation of Measure E as previously modified by the board on August 15, 2013,” Ms. Allen read. “This settlement also ends the litigation and enables the district to move forward with implementing the programs to be funded by Measure E as approved by the voters in 2012.”
“Following the passage by the voters, on March 6, 2013, the California Court of Appeals issued a published decision in the case of Borikas v. Alameda Unified School District,” the district’s statement said. “Borikas interpreted the statute authorizing school district parcel taxes by among other things holding that parcel taxes had to be assessed at a uniform rate for all types of parcels. The Borikas decision became final on June 12, 2013 following the California Supreme Court’s denial of review.”
“As a result of the finalization of the Borikas decision, the Davis Board unilaterally took action to bring Measure E into compliance with its holdings. This settlement reflects the plaintiffs agreement that the measure is now in compliance with Borikas,” Sheila Allen read. “This settlement agreement terminates the litigation and will result in a judgment validating Measure E as modified by the board. The district is pleased this matter could be resolved and that Measure E can now be implemented according to the will of the voters to support the District’s Educational programs.”
In addition to agreeing to establish a uniform parcel tax rate of $204 for all types of parcels, the district has also agreed to pay $70,000 in attorney fees.
We believe that the board acted rashly and without proper justification in making these changes. Measure E contains a severability clause: “Should any part of the measure be found by a court of competent jurisdiction to be invalid for any reason, all remaining parts of the measure or taxing formula hereof shall remain in full force and effect to the fullest extent allowed by law.”
That severability clause means that Measure E was never in trouble. It was never in danger of being invalidated. That clause limited exposure for the district in this lawsuit. Worst scenario, Judge Maguire would have ruled that the school district violated the constitution in its differential assessment of multiunit housing versus single-family units, and would have ordered the district to go back and fix it as they have today.
But if that is the worst case scenario – why do it now, absent a court order? The similarities between Davis’s parcel tax and Alameda’s are not nearly as close as one might think.
The 2008 Alameda parcel tax levied a four-year emergency tax at $120 per residential parcel and 15 cents per square foot for commercial/industrial parcels. That is a very different circumstance to what happened in Davis.
Think about this – you now have a single family home paying $204 and you have apartment complexes, some with over 100 units, rather than paying $20 per unit, paying the same flat $204 fee as the single family home.
In the case of Alameda, there was not a clear rationale for needing to distinguish between residential and commercial. In this case, you are attempting to create a relatively equitable situation, where you account for the large numbers of units.
Given the low risk, it was at least worth testing to see if the Borikas decision applies to Davis’ situation or if it was only a reflection of the unique character of the Alameda parcel tax.
Now the question is what the fiscal impact will be on this decision. With dozens of large apartment complexes in the city, we face losing substantial amounts of money, as every dwelling with more than 10 units ends up being a net loss now to the district.
People, misunderstanding what a parcel tax is, have argued that renters in multi-unit properties should pay the same rate as others. This decision by the school board actually moves things in the opposite direction. Those who live in duplexes will pay more, but it means that owners of large apartment complexes will pay the same $204 rate as those who own their homes.
That is $204 total, not $204 per unit. That means instead of $204 dollars per unit, anyone in an apartment complex of 10 units or more will pay far less per year.
What is the fiscal impact of that on the district? We don’t know for sure.
The worst part is that, absent legislation that at least now seems unlikely, we are now stuck. We did not test the Borikas decision to see if it applies to Davis’ parcel tax, so now we can never differentiate between single family dwellings and multifamily dwellings.
The district has screwed up here – they needed to test this decision in the courts to see if they could go forward with differential rates. They had very little – other than legal expenses – to lose by doing so. There was no overall risk to the overall parcel tax.
Should the district put the matter back on the ballot? It does not matter now. The public is going to support the parcel tax, however it is framed. 69% of the voters supported it last time, the district has had significant support, and we do not see that changing.
That said, the district has now made what we have seen as a string of bad decisions – this only being the latest one. We don’t know what would have happened had the case gone forward, but given the severability clause and the likely impact on the school district, we believe the district should have taken that chance.
—David M. Greenwald reporting
So easy to be a pundit so hard to be a leader. This already cost them $70,000 in litigation costs. How much should they have spent?
Why didn’t you ask the district what the financial impact would be before judging their actions? My guess is when the next parcel tax comes up they can do the math to get to the number they need under this structure so the loss is limited to the duration of this measure.
As for Granda his anti-tax crusade ends up saving money for a few duplex owners and the biggest landlords in Davis while enriching his lawyer at the expense of the kids. To think he had the nerve to run for school board yet didn’t learn from coming in last how out of the mainstream his views are judged by the community can only be described as tragically sad.
Hopefully, the big landlords will pass their savings on to their less wealthy tenants through deferral of rent increases or make big donations to the Schools Foundation, something many of them already do anyway.
David wrote:
> Think about this – you now have a single family
> home paying $204 and you have apartment complexes,
> some with over 100 units, rather than paying $20
> per unit, paying the same flat $204 fee as the
> single family home.
Davis had hundreds of duplexes that were paying just $40 (2 x $20) and fourplexes that were paying just $80 (4 x $20) that will now be paying $204 each. I’m betting that the schools will end up with MORE money after this change.
I don’t have the data for the entire city and I’m sure some big apartments will get a tax break, but most apartments in town are on multiple parcels and many will see a huge tax INCREASE.
Using the 100 unit College Town Commons in South Davis as an example at $20/unit they were paying $2,000/year, while at $204 per parcel they will be paying $5,100 (a 255% increase).
I’m wondering if anyone knows what is going on with Measure C that is still charging Davis homeowners $327 per “parcel” and Davis apartment owners $150/unit? Unlike Measure E that is probably getting MORE money on a “per parcel” basis if Measure C went to a flat “per parcel” the schools would get a lot LESS money.
The irony is that Granda campaigned against the parcel tax because he thought it was unfair that apartment dwellers pay so much less than single homes. This result has only lowered the amount that apartment dwellers pay, and it’s due to his action.
I think his intent was to derail the whole measure, somehow, but I don’t think he took into account the severability clause.
SOD: [i]I’m wondering if anyone knows what is going on with Measure C that is still charging Davis homeowners $327 per “parcel” and Davis apartment owners $150/unit? Unlike Measure E that is probably getting MORE money on a “per parcel” basis if Measure C went to a flat “per parcel” the schools would get a lot LESS money.[/i]
I asked someone with the district about that a while ago, and was assured that Measure C wasn’t vulnerable to a Borikas lawsuit. I think what is going on is that the Borikas decision was not retroactive and so doesn’t affect anything passed before.
wdf1 wrote:
> The irony is that Granda campaigned against the
> parcel tax because he thought it was unfair that
> apartment dwellers pay so much less than single
> homes. This result has only lowered the amount
> that apartment dwellers pay, and it’s due to his
> action.
As a result of the change the district made to Measure E every parcel regardless of size will pay the same tax. It will reduce the amount that “some” apartment dwellers pay while it increases the amount that other apartment dwellers pay (in the end I’m guessing that the schools will get more money).
> I think what is going on is that the Borikas
> decision was not retroactive and so doesn’t
> affect anything passed before.
I’m no legal expert, but I thought all US laws and court decisions were retroactive.
When the courts decided that taxing people of color at the polls in the south was wrong counties that had the laws in place before the decision didn’t get to keep the minority only poll taxes in place.
“I’m no legal expert, but I thought all US laws and court decisions were retroactive. “
No acts committed before a law is enacted can be prosecuted under a new statute.
Mr. Toad wrote, “To think he had the nerve to run for school board yet didn’t learn from coming in last how out of the mainstream his views are judged by the community can only be described as tragically sad.”
Actually, I came in last during the run for DJUSD School Board, not Jose Granda. What is tragically sad is that if you have a minority opinion in Davis you are vilified. The fact that Jose Granda followed his heart with regard to the parcel tax, leveraged a legal precedent, and was victorious should be celebrated by all underdogs whether or not you agree with him.
[quote]SOD: I’m wondering if anyone knows what is going on with Measure C that is still charging Davis homeowners $327 per “parcel” and Davis apartment owners $150/unit? [/quote]
Toad
[quote]No acts committed before a law is enacted can be prosecuted under a new statute. [/quote]
That’s a very good question SOD. Toad, I agree with you but I wonder if future Measure C taxes should now fall under this new law? Anyone up on this?
Following his heart just cost the community $70,000. You could put an additional teacher in a classroom for that same money. I have no problem with him opposing the ballot measure but filing a lawsuit that changes little and is only settled to save additional legal fees deserves not only vilification but also contempt.
SOD: [i]in the end I’m guessing that the schools will get more money[/i]
When the Enterprise reported this ([url]http://www.davisenterprise.com/local-news/what-are-the-impacts-of-parcel-tax-change/[/url]) back August, they indicated otherwise:
[quote]The original Measure E language (charging $204 per year for single family homes, and $20 per year for apartments and other multi-unit dwellings) would have generated about $3.2 million annually, according to estimates in Fall 2012, when Measure E went before voters. An analysis in the agenda packet for Thursday night’s school board meeting suggests that under the new uniform rate, Measure E will generate about $3.085 million per year.[/quote]
Sherman: [i]What is tragically sad is that if you have a minority opinion in Davis you are vilified. The fact that Jose Granda followed his heart with regard to the parcel tax, leveraged a legal precedent, and was victorious should be celebrated by all underdogs whether or not you agree with him.[/i]
I am challenged in knowing how to appreciate or celebrate Granda’s position beyond the fact that he provided an opposition platform. Rather than establish a set of principled arguments, he adopted any opposition argument that suited the situation. Several of his arguments were contradictory, or unclear. The whole array of arguments left me with the overall impression (in spite of his insisting otherwise) that he just didn’t like the local public schools and didn’t want to fund them.
One example of this is his claiming fruits of victory in settling this lawsuit, in spite of the fact that it contradicted one of his key arguments that all apartment dwellings ought to pay the same amount as individual houses. (See Enterprise story ([url]http://www.davisenterprise.com/local-news/davis-school-board-announces-settlement-of-measure-e-lawsuit/[/url]))
As a school board candidate, he advocated for school site fundraising, as if it had never before happened in Davis, but never bothered to explain what was new or different about his idea. The reason I think he finished ahead of you was because he was the only candidate who opposed Measure E, so he captured all of the school parcel tax opposition vote.
I wrote:
> in the end I’m guessing that the schools will get more money
Then wdf1 wrote:
> When the Enterprise reported this back August, they indicated
> otherwise:
> about $3.2 million annually, and
> about $3.085 million per year.
I forgot that so many seniors were able to vote yes on measure E then opt out of paying it when estimating the ratio of single family homes, duplexes and fourplexes to apartments. I bet the $3.088mm includes the data on so many people that are not paying the tax.
Any idea if the list of seniors opting out of the tax is public record? It would not only be interesting to see how many people opt out, but to let the childless by choice people paying a big mortgage every month shame their mortgage free wealthy senior neighbors in to paying the tax since the good Davis schools are going to pay every property owner back when they sell their real estate.
P.S. I just got an e-mail from an apartment owning friend with a 15 unit apartment in town and the tax bill (that just came in the mail about a week ago) says:
Davis JT Unf Measure E 2013 $204 (Same as his home tax bill)
Davis JT Unf Measure C 2012 $2,250 ($1,923 more than his home tax bill)
P.P.S. If a senior lives in one unit of a Duplex or Fourplex they own any idea if they have to pay any parcel tax at all?
[quote]SOD: I’m wondering if anyone knows what is going on with Measure C that is still charging Davis homeowners $327 per “parcel” and Davis apartment owners $150/unit?
Toad
No acts committed before a law is enacted can be prosecuted under a new statute.
That’s a very good question SOD. Toad, I agree with you but I wonder if future Measure C taxes should now fall under this new law? Anyone up on this? [/quote]
Comeon, any lawyers want to put their two cents in? How about my lawyer buddy Siegel?
wdf1
[quote]the adopted any opposition argument that suited the situation. [/quote]
And you didn’t?
SOD: [i]Any idea if the list of seniors opting out of the tax is public record?[/i]
It is. David Greenwald asked for it, maybe a year ago, and did at least one Vanguard piece ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=5828:claimants-in-suit-against-djusd-may-lack-standing-to-bring-action&catid=69:elections&Itemid=121[/url]).
G.I.: [i]And you didn’t?[/i]
Just responding to Sherman’s comment from a personal perspective. Why I couldn’t get into celebrating Granda’s position.
A positive I’d concede is that his opposition (even if I couldn’t understand it) better clarified for me why I supported it.
Can all seniors opt out or do they have to meet some income qualifications?
B. Nice: One must be 65 or older and owner resident of the property being taxed. No income qualifications. State law allows for this kind of exemption.
I suspect the authors of Measure C realized that the senior population tends to vote larger numbers than any other age group, and giving them a blanket exemption for their age regardless of ability to pay would nudge them in the direction of voting yes. It is always easier to vote for something if it someone else’s ox who will get gored. Some sort of means testing would have been much better in my humble opinion.
Alphabet problem……..Measure E!
wesley506: The senior exemption option has been available in Davis school parcel taxes probably since the 1980’s. It isn’t new to Measure C or E.
I guess you also argue for taking out the SSI exemption? Those are the only two exemptions allowed for under state law, which also doesn’t allow for any other modifications to school parcel taxes that might reflect means testing in some way. Some school parcel taxes had differential assessments for apartments, but Granda’s lawsuit helped to do away with that in Davis.
wesley506 wrote:
> I suspect the authors of Measure C realized
> that the senior population tends to vote larger
> numbers than any other age group, and giving them
> a blanket exemption for their age regardless of
> ability to pay would nudge them in the direction
> of voting yes. It is always easier to vote for
> something if it someone else’s ox who will get
> gored.
It was not the Davis folks that thought of this, it goes back almost 30 years after the first parcel taxes had a tough time getting the 2/3 vote (required by Prop 13) that the pro-parcel tax people figured out a great way to give one of the biggest groups of voters the option to support he schools (without actually paying anything).
> Some sort of means testing would have been much
> better in my humble opinion.
The law specifically bans any means testing since some of the most frugal people in America are rich seniors. The early backers of the parcel taxes didn’t want to have to fight rich seniors that were against the measure on principal so they made sure that ALL seniors were exempt.
P.S. A few years back a friend told me his rich (retired MD who owns his ~$3mm home free and clear) filed the senior exemption form to avoid paying the new ~$250 school parcel tax. His Mom told him that she was so mad her cheap husband did that (after sending all his kids through the good local public schools) that she made a $1,000 donation to the local school foundation without telling her husband…
To qualify for SSI you have to be disabled, have less than $2,000 in assets for an individual or $3,000 for a couple, and have a monthly income that cannot exceed $710 for an individual and $1,066 for a couple. A reasonable means testing program would therefor obviously allow anyone who is on SSI to qualify for an exemption. So yes I would be very much in favor for replacing a blanket age and any other exemption (including SSI) with a income based means testing program that states if your income is above a certain level you pay the special assessments.
“Now the question is what the fiscal impact will be on this decision. With dozens of large apartment complexes in the city, we face losing substantial amounts of money, as every dwelling with more than 10 units ends up being a net loss now to the district.”
Why is 10 the magic number?
“Why is 10 the magic number?”
Current is $204 per parcel. Previous was $20 per rental unit. So anything larger than 10 units, is a net loss for the district.
Got it. So we used to own one side of a duplex, do people in this situation only have to pay $102?
I’m assuming there is no way to link parcel taxes to property value?
No link to property value, that’s prohibited under Prop 13. And yes, the duplex situation is $102, whereas before I believe it was $20. Those people probably have a legitimate beef here.
[quote]And yes, the duplex situation is $102, whereas before I believe it was $20. Those people probably have a legitimate beef here.[/quote]
We sold our half, (all 960 sq. feet of it) of the duplex in 2006 for $400,000. I’ll assume that the new owner could manage a $204 parcel tax. It’s disconcerting that they would have only had to pay $20. What about condo’s are they considered multi-family units also?
David, do you have any thoughts about this?
[quote]SOD: I’m wondering if anyone knows what is going on with Measure C that is still charging Davis homeowners $327 per “parcel” and Davis apartment owners $150/unit?
Toad
No acts committed before a law is enacted can be prosecuted under a new statute.
That’s a very good question SOD. Toad, I agree with you but I wonder if future Measure C taxes should now fall under this new law? Anyone up on this?
[/quote]
On duplexes/half-plexes: If your half-plex is situated on a separate parcel from the other, then you would pay full value. If your half-plex is on the same parcel as the other half-plex, then it would be split with that unit. It is a tax on the land parcel, not the unit(s).
[quote]On duplexes/half-plexes: If your half-plex is situated on a separate parcel from the other, then you would pay full value. If your half-plex is on the same parcel as the other half-plex, then it would be split with that unit. It is a tax on the land parcel, not the unit(s).[/quote]
Okay, our old “half-plex” was on a separate parcel from the neighbor we shared a wall with, so each half pays full price. I believe this is the set-up from duplexes in newer developments.
Before the district “blinked” my friends who owns a duplex on one parcel, (they live on one side, and rent the other side out) would only have had to pay a total of $40. While the people who bought my tiny 2 bedroom 1 bathroom half-plex would have to have paid $204. Not that it matters anyone but I wonder if they could have set up a minimum tax of at least $204 per parcel.