All weekend I kept getting messages from people not wanting to pay for a parcel tax increase, arguing that we need to “right size” the school district or eliminate out-of-district transfers. I get that people don’t want their taxes to go up, but eliminating out-of-district transfers isn’t going to save them here – it will actually make it worse.
Ironically, Associate Superintendent Matt Best put forward getting more students from outside of the district as a revenue providing solution. The idea would be to grow enrollment which would add ADA (average daily attendance). The trick is to do so without having to add teachers or facilities.
Matt Best explained to the board: each out-of-district student added to the district contributes about $9000 to DJUSD revenue. He argued, “An additional 120 students would not change the basic structure of the school district, with a net revenue increase of approximately $1.0 Million.”
When asked by Cindy Pickett, what’s our ability to get 120 more students in the district, Matt Best said that he believes this would be a realistic number that they could get to.
“I think 120 is probably reasonable,” he said.
But you can’t seem to convince people that this is the case. The argument goes that adding students from outside of the district might increase ADA – but the district doesn’t get the parcel tax attached to the students.
The big problem here is that there is no parcel tax attached to the students. Parcel tax money is attached to parcels and comes to the district whether or not the parcel has students living in it.
This seems to be a very difficult concept for people to grasp.
Perhaps the best way to think about it is to state that no student added to the school district will lead to more than $9000 being added to the district coffers.
Perhaps a quick illustration of this phenomenon is in order.
Currently, every parcel in the district pays $620 per year to the parcel tax. That money is based strictly on the number of parcels. Senior residents can opt out. Apartments are charged as though they were one parcel, whether there is one apartment or 500 apartments in it.
There are a ton of scenarios, therefore, by which people with children in the district do not pay for the parcel tax – those include those who reside in apartments, those in subsidized housing, etc. That is a sizable percentage of DJUSD students right there.
But imagine these scenarios:
- Family with kids moves into single family home – all of a sudden there is a student in that, whereas before there was not – the district gets no additional parcel tax money
- Family without kids has a child – all of a sudden there is a student in that, whereas before there was not – the district gets no additional parcel tax money
- Family with one kid has a second child – all of a sudden there is a student in that, whereas before there was not – the district gets no additional parcel tax money
The point here is that the district receives the same amount for that house in parcel tax, whether there is zero, one, or two or more kids living in the home.
So why is the person from outside of Davis being singled out here, when in fact many people who send their kids to school do so without adding to the district’s parcel tax take – either because they are not paying any parcel tax or because they have simply moved into a house that had no kids previously but was paying the parcel tax regardless.
Yet there is the belief that a sizable number of people from outside of the area are using our facilities without paying. That’s not exactly true. They are paying their property taxes, which through ADA get diverted to DJUSD.
They are not paying the parcel tax, but that’s also true of renters. Someone countered that renters get their parcel tax passed through their rent. That might be true if they rent a house – hard to know precisely – but if they rent an apartment, it’s unlikely that they are paying anything because most apartment complexes are only paying $620 per year for a parcel tax. Break that down by unit and by month and for any complex over 50, the cost is less than $1 per month per unit.
The net impact of out-of-district students is a positive not a negative.
Here’s the math…
When I walked through the numbers last year with Matt Best, the district calculates it gets about $5.6 million from the out-of-district transfers. Removing about 25 sections from the district would save $1.6 million. That means that the district believes it nets about $4 million from out of district transfers – and that is another reason why they propose one revenue strategy is to add rather than subtract transfer students.
Bottom line here – the parcel tax argument doesn’t make any sense.
There are viable arguments here against taking out-of-district transfers and reducing the size of the district, but this is not a road toward closing what is believed to be about a $2.8 to $3.2 million gap for the district.
Removing out-of-district transfers is not going to close that gap. In fact, from all of the data I have gleaned, it will make the gap worse. You may still want to look at doing, that but not as a solution to the teacher funding gap.
I know people believe we are disadvantaged because out-of-district transfers do not add parcel tax money – but that’s not how the parcel tax works. No student added creates parcel tax money.
—David M. Greenwald reporting