Looking Locally for Financial Support

Last month, amid unprecedented state budget cuts for public higher education, the San Mateo County Community College District became the first community college in California in decades to win the authority to levy a local property tax specifically to help fund its overcrowded institutions.

July 20, 2010

Last month, amid unprecedented state budget cuts for public higher education, the San Mateo County Community College District became the first community college in California in decades to win the authority to levy a local property tax specifically to help fund its overcrowded institutions. Now, nearby Foothill-De Anza Community College District, in the heart of Silicon Valley, is seriously considering asking for a local property tax of its own to help make up for slumping state support. Is a funding revolution underway in the Golden State?

The result of the June 8 vote in San Mateo came as a surprise to many political observers around the state. Since the passage of Proposition 13 in 1978 — the landmark amendment to the state constitution that capped property taxes — most funding of California’s community colleges has come from the state government. Prior to its passage, community colleges regularly received significant funding from local property taxes. Measures to win back the tax levy require a two-thirds supermajority of the vote to pass. Given this, none of the state’s 72 community college districts had ever attempted to pass such a measure. K-12 school districts throughout the state, however, have frequently succeeded in doing so.

Though history was not on its side, the community college district in San Mateo pulled off a close election, winning taxing authority with 67.1 percent of the vote.

“It’s hard to get two out of three people to agree on anything,” said Ron Galatolo, chancellor of the three-college district. “But we did it.”

The tax will cost property owners in the district $34 per parcel, or unit of property, annually. Property owners age 65 and older have the ability to opt out of the tax if they so choose. As there are about 220,000 parcels in the county, the tax could generate as much as $6 million per year for the college district. Still, the levy only lasts four years.

Opposition to the levy came primarily from two local taxpayers' associations and a state property rights group. In their mutually penned “arguments against” the measure, they pointed out that only San Mateo County residents would have to pay the tax even though the community colleges within it serve a sizable number of students from elsewhere. The poor economy — a rallying cry for college officials — was also cited as an argument against the tax.

“Now is not the time for more taxes,” read the critics’ pre-election case to voters. “Thousands of employees are laid off or furloughed. Self-employed business owners have less work, or have closed altogether. Yet their property taxes are still due. Everyone who can't afford all these taxes will lose their homes.”

Though critics said the district would never be able to win taxing authority, polling of likely voters hinted otherwise. Given the college's dire financial straits, Galatolo said the measure was worth a try. He added that any money the tax will generate, though not making up for state cuts, will make a noticeable difference on his campuses.

“Through no result of what we’ve done, we found ourselves in a huge financial crisis,” he said. “We’ve had a $25 million dollar reduction in our budget in the past two years. … Student demand is higher than it’s ever been. We have 14,000 students on waitlists. We simply had to take it upon ourselves to see what support we have in the community.”

Though most political observers doubt state funding levels for higher education will increase all that much in four years, Galatolo said the district will have to reexamine whether to renew when the time comes. As to why the district only asked for a four-year tax levy, his answer was simple: “I wanted it to pass.” Polling of likely voters showed support for the measure decreased as time commitment increased.

Officials from Foothill-De Anza Community College District, just due south of San Mateo, watched their neighboring colleagues’ local election victory with great interest.

Linda Thor, chancellor of Foothill-De Anza, said the news of San Mateo’s victory had a “warming effect” on her district’s debate over whether it should consider asking for permission to tax its local property as well. The district’s Board of Trustees will decide at its upcoming August meeting if it will put a referendum on the November ballot.

“We’ve had our budget cut by $20 million in the past two years,” Thor said. “Also, we’re finding ourselves turning away thousands of students at a time when community colleges are key to getting people on their feet again. It’s against the nature of community college folks to turn away students who need us. We need to begin looking out for ways to take back more control of our financial future.”

Initial polling of likely voters in the district shows strong support — more than 70 percent approval — for a $69 per parcel property tax that would last six years. One argument for the measure, Thor noted, polled particularly well among likely voters.

“Voters responded very positively to the notion that these funds couldn’t be taken away by Sacramento and would be spent exclusively locally,” Thor said.

Though admitting that funds from a successful parcel tax could not be counted upon year in and year out — as there are no guarantees of a renewal — Thor said she thinks more community college districts in California will be looking to get local taxing authority to make up for recent state budget cuts. She added that she would prefer that her district have more local control over its financial affairs, much like districts do in Arizona, where she was recently president of Rio Salado Community College.

“It’s totally night and day from Arizona to California,” Thor said. “You have much more control over your own fate in Arizona. Local boards of trustees set tax levies; local boards set the tuition rate. Also, in Arizona — being a much less populous state — you, candidly, have more ability to directly influence the legislature. … Certainly, more local control is better.”

Even if Foothill-De Anza successfully becomes the second community college district in California to earn local taxing authority, Thor and Galatolo admit that the idea is not likely to take hold everywhere in the state. More liberal communities near the coast, they said, are more likely to approve such levies, whereas more conservative communities farther inland have a history of voting against tax increases.

Other education officials who know that state’s politics well agree.

"It likely could serve as a fiscal band-aid to the state's budget woes …for a handful of districts,” wrote Scott Lay, president of the Community College League of California, in an e-mail. “It is unlikely that more than a dozen of the 72 [districts] will seriously entertain a parcel tax.”


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