What Proposition 15’s Defeat Means for California Schools

Voters narrowly defeated Prop. 15, the tax measure that aimed to eliminate decades-long protections for commercial properties—dashing hopes of billions of dollars flowing into California’s cash-strapped public schools in the coming years.

In the second-most expensive ballot fight this election, Prop. 15 supporters said the measure would help right what they viewed as a fundamental wrong in the state’s school funding system by increasing the share of property-tax revenues going toward schools. Opponents characterized Prop. 15 as harmful to small businesses and the state’s economy at a time when the pandemic has already strained or shuttered several local businesses.

“We’re the fifth-largest economy in the world,” said E. Toby Boyd, president of the California Teachers Association, the top benefactor for the Yes on 15 campaign, “and big corporations should be paying their fair share to invest in our students, our public schools, our families and our communities.”

The measure backed by labor unions, community organizations and several of the state’s progressive leaders challenged the state’s still-popular 1978 constitutional amendment, Prop. 13, and had been slightly trailing in the vote count since election night before the Associated Press called its defeat by a 51.8 percent No to 48.2 percent Yes margin.

What Happens Now?

Legislative analysts projected Prop. 15 would have drawn between $6.5 billion and $11.5 billion in commercial property tax revenues, with 40 percent of the take going to K-12 schools and community colleges beginning in 2022-23.

So while the measure would have been a boon in the long term, any financial fruits borne out of a Prop. 15 win would not have arrived soon enough to address the immediate twin financial crises facing the state’s public schools: Tense efforts to physically reopen campuses and the state education budget’s looming cliff.

California K-12 schools and community colleges, almost a decade removed from the steep Great Recession-era cuts that resulted in more than 30,000 teacher layoffs, were slated to receive a record $84 billion in state funding this year—up from $81.6 billion—before the pandemic cratered the state’s budget forecast.

Faced with a potential 10 percent cut to the state’s main school finance artery, the Local Control Funding Formula, Gov. Gavin Newsom and the Legislature protected school budgets this year by deferring $11 billion in state funding for schools. That move held schools’ funding flat by delaying payments to schools into the next fiscal year—some installments coming as late as seven months—but also means the state will have to confront a potentially taller school finance cliff starting next year.

“Yes, Prop. 15 would’ve helped in the long run, but it wouldn’t have fixed this short-term problem that the Legislature’s going to face in the coming spring,” said Bruce Fuller, a professor at UC Berkeley’s Graduate School of Education.

As state education funding increased over the latter part of the decade, so too have fixed costs such as employee pension contributions and support services for growing populations of students in the state who have special needs or are English learners.

Several communities across California with the state’s permission to reopen campuses are engaged in fraught debates among school leaders, teachers, parents and employee unions over when and how to do so.

Among the sticking points has been whether schools have the resources to implement and sustain safety measures, such as surveillance coronavirus testing for employees. At a recent legislative hearing, state lawmakers acknowledged schools’ dearth of testing capacity was prolonging potential campus reopenings while noting that the state had little room in its budget to assist with local efforts.

State officials have suggested on several occasions schools tap into $5.3 billion in federal coronavirus relief funds allocated for schools this summer to purchase laptops and technology for remote learning, personal protective equipment and expand their coronavirus testing bandwidth.

“(This) is not magical money that can be stretched forever,” Troy Flint, spokesman for the California School Boards Association, said of the CARES Act funding, adding that schools are “in a very perilous position” financially.

“Anytime there’s a new expectation or the state imposes a new requirement, it keeps pointing to that same pot of money,” Flint said.

Prop. 15 is the second education-related statewide measure to face defeat this year, in part, due to the tall shadow of the landmark measure commonly referred to as the third rail of state politics.

Voters also rejected in the March primary a $15 billion state bond for school construction that, because of the state’s sequential numbering requirements for ballot measures, shared the same name as the 1978 property-tax cut: Prop. 13.

Though some political observers pointed to the measure’s confusing name as a reason for its defeat, others also noted that its supporters failed to adequately communicate to voters the bond’s importance.

Despite Prop. 15’s defeat, supporters were optimistic late election night when initial returns came in, saying that the closeness of the vote suggested an appetite from voters to invest more money in public services such as K-12 education.

At the local level, school measures across the state continued to receive broad support—another sign of voters’ support for education funding, according to advocates.

About 80 percent of the 60 K-12 and community college bonds on local ballots, including a $7 billion bond in Los Angeles Unified, appeared headed toward approval at press time, according to results gathered by Michael Coleman, publisher of the California Local Government Finance Almanac.

Nine out of 13 parcel taxes, which require two-thirds voter approval, appeared to pass, though the votes remained too close to call in two communities.

Another attempt at an education-related tax measure in the near future seems likely, though it’s too soon to predict how a future measure would be structured. Also unclear at the moment is whether education and community advocates would again mount their own effort, similar to Prop. 15, or if the governor and Legislature would get involved.

Before the state’s budget crunch, researchers affiliated with Stanford University had calculated it would take an additional $25 billion in school funding for all of the state’s 6.1 million public-school students to meet its learning standards. In recent years, some state lawmakers have wanted to go even further. The pandemic has increased those needs, according to advocates.

Newsom endorsed Prop. 15 in September, though did not campaign for the measure. He also said recently he would not support legislation calling for higher income taxes.

Whatever the course, the road to more schools funding will likely require broad support among state leaders, education unions, advocacy groups as well as a unified message, said Carrie Hahnel, an independent education researcher and fellow with the Berkeley-based Opportunity Institute.

Without federal or state intervention, Hahnel wrote in a recent Policy Analysis for California Education brief, schools are likely to face a downturn like the one they experienced nearly a decade ago. Because California’s public schools are heavily reliant on state income taxes, it makes them more susceptible to volatility amid the peaks and valleys of the state’s economy, Hahnel wrote.

In 2012, at the tail end of the recession as the state neared a similar school funding cliff, then-Gov. Jerry Brown campaigned aggressively for Proposition 30, a quarter-cent sales tax that aimed to prop up school funding. The message then was clear: Vote yes or schools stood to lose $6 billion in cuts.

It passed, 55.4 percent to 44.6 percent. That kind of support from the governor might be what it takes to put a future ballot measure over the top.

“I think we need to start from scratch and get everybody together and say what we are trying to do and how we can build this thing even if it means some compromises, some shared pain,” Hahnel said. “It’s very hard to hit the business community alone.”

Ricardo covers California education for CalMatters, a nonprofit nonpartisan media venture explaining California policies and politics.

7 Comments

  1. > “Yes, Prop. 15 would’ve helped in the long run, but it wouldn’t have fixed this short-term problem that the Legislature’s going to face in the coming spring,”

    You used “problem” and “legislature” in the same sentence.

    Do you realize what you just said?

  2. Please raise our taxes. We need to bail out the corpulent and failing state pension system.

    There. Fixed it for ya!

    Meanwhile, the caravans of moving trucks headed east continues to grow.

    Back in the Bay Area, the homeless encampments continue to grow.

    Eric Swalwell continues to bang Chinese spies.

    Gavin Newsom collects how many millions of dollars of small business relief for the covid inspired shutdowns?

    Keep squeezing those rocks. Blood will come out. Eventually.

  3. Every year they ask for more money for schools, most bonds and assessments pass with ease. Then the next year they ask for more, then the next, then the next.

    I remember 30 or so years ago that the CA State Lottery was going to be the saving grace for schools, millions of new dollars would be available for all of their needs. Since then, we have passed millions of dollars in increased taxes and property taxes for our schools.

    Yet we have seen no improvement in our schools. In fact the rankings have gone the other direction.

  4. Poorly written and one-sided screed. At least over half the people in the state can do basic math and understand that when you Increase taxes on commercial property, the landlords pass those tax increases to the tenants, who intern pass them on to the consumer. Here endth the lesson

  5. “Who runs Britain?”

    A crafty slogan that capture the essence of the issue with union and government. The Tories used the union problem to keep Labour out of power through the 80s. The NUM problem was also a strong motivation in getting the UK to join the common market, the same one the Tories used to to hold power recently, but this time to leave. Unions can not help themselves, they fight for the interest of the union and for a time that is good for society, and then it is bad. They show over and over they are incapable of perspective and effectually destroy their raison d’être. Once the Iron Lady was in, the unions were broken, the working class was beaten down to a pulp, and the EU common market did the rest. Even as a conservative, I have to think much of what happened there was bad for England and mostly for the working poor.

    “Who runs the California?”

    Every fool in CA knows the unions do. The Funk Incident recently is just one example. The teacher’s union do not run the schools to educate kids, they run the school to protect their constituents, the teachers. That is obvious in this year’s student lock-out, that is obvious in their performance in education minority children, that is evident in their adamant resistance to charter schools, and that is obvious in their blatant and repeated protection of pedophile teachers. And all the other unions are the same, they can’t help it, just like the private sector unions are in the business of making a company profitable or make better products, public sector unions are the business of getting the most they can for their members. The political problem is their power is growing unbounded and they are forcing a similar situation in San Jose and California.

    It is not just Teacher’s Union, but public sector unions. Calpers has not met their invest return goals, and only can fund 69% of its liabilities. Perhaps the teacher’s union pension fund is run better, but I think they are more like to be like NJ, Chicago, and CA going forward than not. San Jose will have to pay out of the general fund the rest. All CA cities will.

    That is why revenue drives decisions in San Jose and California, why jobs ratio must go to 1.3 per house, why they debase themselves to Google and Facebook, that’s why Pelosi won’t pass a Relief bill without City and State government bailouts. In general why your past was too difficult, your present sucks and your future is worse. There is no right wing conspiracy out there, this isn’t Trump’s America, or the 75M white supremist red neck Nazis that make up the GOP. It is a known problem and scapegoating will not help you.

    If you don’t get control of this and curb the power of these unions, your future is simple:

    Thatcherism or Detroit

  6. SJ Kulak. Good post and I mostly agree. I mostly can’t stand the Republican Party and yet I’m not really going to mind if they win at least one seat in Georgia b/c it’s difficult to really trust the Democratic Party.

  7. XBR976 – Thank you, now in retrospect, I think the slogan was “Who Governs Britain?”, but its all the same. And of course my spelling and grammar are atrocious as the norm, but to my defense my eyesore is so bad, it is hard to tell the difference between low intelligence and just not being able to see what I thumbed into this damned phone.

    I vote GOP for only one reason, to delay the Californization of the United States. That’s why I still read these blogs, it is ground zero on the manifestation of wrongness (in my opinion.) But really there is not much difference in the rank and file federal level DNCer and GOPer. But Trump, for good or bad, was mostly a thorn in all their sides. I don’t know who hated Trump more Paul Ryan or Nancy Pelosi, Chuck or Mitch. Mitch probably hated him the most and had his jewels in a can almost the entire time, so hate may not be the right word, actionable contempt, maybe.

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