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Lincoln Institute 2015
- 1. Political Economy of Parcel Tax in California School Districts Soomi Lee, Ph.D. Assistant Professor University of La Verne April 30, 2015 Lincoln Institute Cambridge, MA
- 2. Parcel tax • Define parcel tax • Regressivity • Parcel taxes to supplement school funding in California • Study political economy of parcel tax adoption
- 3. History • Before proposition 13: • Serrano v. Priest • Proposition 13 – Property tax cap: regulate the level (1%) and the growth (2%) of ad-valorem property taxes – Special districts for special taxes by 2/3 supermajority votes – Definition of “special taxes”
- 4. California Tax Foundation, 2014 36 25 15 7 7 3 2 2 2 1 Education (K14 school districts) Infrastructure Health Care Park and Recreation Fire Protection District Library Public Safety Unavailable Emergency Medical Services Other Local Parcel Tax Revenue in California ($1,9 billion in 2013-14) 1970 parcel taxes in 754 local governments
- 5. Consequences • School funding – Unmet demand for education spending – Get around Prop 13, gain local control parcel taxes and voluntary contributions
- 6. Parcel tax elections for schools 1983-2014 • I identified 644 school district parcel tax measures from 1984 to 2014. • About 23% of school districts (222) held at least one parcel tax election. • About 13% (124) passed at least one parcel tax measure.
- 7. 57 68 70 84 93 108 2003-04 2005-06 2007-08 2009-10 2011-12 2012-13 Increasing Number of California School Districts with Parcel Taxes Ed Source 2013. Data: SACS unaudited data files, California Department of Education
- 8. 137.5 208.6 216.3 307.5 343 2003-04 2005-06 2007-08 2009-10 2011-12 57 districts 68 districts 70 districts 84 districts 93 districts Increasing Parcel Tax Revenue ($millions, 2011 constant) Ed Source 2013. Data: SACS unaudited data files, California Department of Education
- 9. 2.4 3.1 3.1 3.7 3.7 2003-04 2005-06 2007-08 2009-10 2011-12 57 districts 68 districts 70 districts 84 districts 93 districts District Average Parcel Tax Revenue ($millions, 2011 constant) Ed Source 2013. Data: SACS unaudited data files, California Department of Education
- 10. Previous Studies on Parcel Tax • Brunner (2001) • Voluntary contributions: so and so • Recent two studies exclusively focusing on parcel taxes for school funding in California: Lang and Sonstelie (2015) and Kiewiet and Hill (2015)
- 11. Lang and Sonstelie (2015) • Marginal cost of schooling
- 12. Kiewiet and Hill (2015) • Political ideology • Electoral strategy of school boards
- 13. Gap in the literature • Political economic perspective • Income distribution • Methodology
- 14. Main contribution in one sentence
- 15. Model
- 16. Empirical Strategy • Matching method • Parcel tax measures v. school construction bond measures
- 17. Data
- 18. School Construction Bonds and Parcel Taxes PPIC, 2013
Editor's Notes
- Are you familiar with parcel tax? Property tax imposed on per parcel Differ from traditional ad-valorem tax on assessed value of properties Requires historical background to understand parcel tax for school funding in California To that end, we need to learn a little but about proposition13 in 1978 and California Supreme Court decision on Serrano v. Priest in 1971.
- Before prop 13, the property tax rate throughout California averaged about less than 3% of market value. There were no limits on increases for the tax rate or on individual ad valorem charges. Some properties were reassessed 50% to 100% in just one year and their owners’ property tax bills increased accordingly.