SAN LEANDRO -- School board members are keeping their fingers crossed and the district's pocketbook open for parcel tax revenue in the coming school year despite a court battle still underway over the legality of the tax.
Board members approved a budget Tuesday that includes $771,000 in parcel tax revenue, less than the $2.4 million a year approved by voters in November. Officials say the amount was calculated based on a flat $39 per parcel levy rather than the planned varied rate of $19 for multifamily lots with five or more units, $39 for unimproved parcels and 2 cents per square foot of lot size for businesses. The lawsuit alleges the district's plan to tax parcels at different rates is illegal, an argument that was successful this year in a legal battle against a varied rate parcel tax in Alameda Unified.
School board President Diana Prola said the board was comfortable leaving some parcel funding in the budget because they believe the businesses suing the district would not object to a flat $39 parcel tax, and other areas of the budget are conservative. For instance, the budget adopted includes just $1.8 million of the $2.8 million in new state funding the district estimates it will get under the forthcoming Local Control Funding Formula, signed into law by the governor Thursday.
Board members also approved taking $450,000 in adult education funds to pay for other district needs, and 3 percent raises recently approved for teachers were also factored in.
Board members emerged from closed session with no reportable action after discussing their legal options following the news earlier this month that the California Supreme Court denied a request to review a lower court's ruling in favor of the Alameda plaintiffs.
Alameda's case has been kicked back to the lower courts to determine how much the district will need to reimburse its taxpayers, but Alameda Unified Superintendent Kirsten Vital has pledged to continue making their best legal arguments to preserve the money that, if lost, "could be a significant blow to our budget with many negative consequences for students, teachers and staff."
Walnut Creek Attorney David Brillant, who represents the plaintiffs in Alameda, San Leandro and plaintiffs in other parcel tax cases in West Contra Costa Unified, Davis Joint Unified and five districts in Los Angeles County, said, "The courts have said the Legislature gave school districts the power to tax, but they did not give them the power to do a split roll parcel tax."
Even though the varied rate structure conflicts with state law, Brillant said school districts over the years have passed "split roll" parcel taxes on the advice on their consultants to increase revenue on the backs of commercial and corporate property owners who often don't live in the district. "You can generate a huge amount of revenue because the electorate base isn't going to be paying a huge premium," he said.
It is unclear if officials from the Alameda County Office of Education, who oversee school district finances in the county, will weigh in on San Leandro's decision to include the disputed and still uncollected parcel tax revenue in their budget when they review it in the coming weeks.
The county Office of Education's associate superintendent of business services, Damon Smith, appeared before the Alameda Unified school board in February to advise them to begin reflecting at least some of their disputed parcel tax money collected from 2008 to 2011 as a liability in their budget.
County Superintendent Sheila Jordan said in a statement, "As with Alameda USD, ACOE will work with San Leandro USD to ensure that its budget is balanced and the district maintains fiscal solvency."
Ashly McGlone covers San Leandro, San Lorenzo, San Ramon and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/AshlyReports.