Los Angeles County school districts experience the largest redirection of school-purposed property tax in the state -- over $2.1 billion a year.
Every year more school-purposed property tax goes to fund 2004 Economic Recovery Bonds and the Vehicle License Fee Swap than actually goes to schools and community colleges. (Of the 40.97% shown below and on the Auditor-Controller's website, 20.2% should be shown as going to schools and 20.8% to State obligations.) The most stable, reliable revenue source has been removed from schools, throwing them even more on the mercy of volatile state aid.
Los Angeles Unified, for example, is shown receiving $852 million of base property tax, plus $19 million from ERAF for special needs last year. An additional $885 million of the county's Educational Revenue Augmentation Fund that would have come to LAUSD before 2004 was redirected. This shortfall is somewhat masked for LAUSD by the sheer magnitude of State subsidy to the district (about $2.2 billion a year), however receiving 40% of that as property tax would have been stabilizing. This last 2012-13 school year finished with $588 million still owed the district; 2011-2012 finished with over $1 billion of overdue payments. This represents 10% and 17% of LAUSD’s respective annual budgets received after the school year ended.
Other unified school districts with high proportions of Low Income/English Learner students were similarly affected. Long Beach saw 23% of its annual budget come in after year-end in 2011-12, as did Lynwood, Compton, Bassett, Montebello, Baldwin Park, Pomona, Hacienda La Puente, Downey and Bellflower. Alhambra, West Covina, Norwalk-La Mirada were slightly higher.
Beverly Hills, the only basic-aid district in Los Angeles County (as a result of the 1979 allocation of property tax that sent 55% to the County and only 20% to LA County schools), was owed just $86,194 last year and $86,193 the year before (about 0.2% of its annual operating budget). Beverly Hills is the only district in LA County whose revenues would be just as stable after termination of the swap.
Santa Monica-Malibu, which is flirting with basic-aid status, was actually slightly overpaid this year (oops), and was owed $2,412,749 the year before (about 2% of its annual operating budget).
The Triple Flip and VLF Swap have impaired transparency and fairness in LA County. The fact that the revenues diverted under the swap were 45% greater than the actual obligation by 2010 -- paralleling and possibly instigating the deferrals -- just adds injury to the insult. (In 2014, they are 58% greater.)
In a period when budgets have already been dramatically cut, these cash flow shortfalls harmed the school districts and schoolchildren of Los Angeles County even more.
Community colleges in the Los Angeles area were similarly affected, having received no Educational Revenue Augmentation at all from property tax. Community Colleges typically experienced 30% deferrals of principal apportionments. Thus they saw just under $300 million of ERAF directed away from them, increasing their State Aid demands by a like amount, of which about $100 million was deferred in 2011-12.
It’s time to grant our schools and community colleges the same protection of their stable, reliable, local property taxes that cities, the county, and special districts (mosquito abatement, lighting, flood, libraries, parks, hospitals) have enjoyed for a decade.
In Los Angeles County, at least $2,089,691,069 was taken out of school-allocated property taxes to pay State obligations in 2010-2011. Over $1,808,624,075 was redirected to satisfy the State's VLF backfill obligation, while more than $281,066,994 was redirected to pay for the State's 2004 Economic Recovery Bonds. (Incomplete information is on file in Sacramento from Los Angeles County receiving entities.) In 2011-12, this grew to $2,134,187,793, consisting of $1,839,004,234 and $295,183,559 for each obligation, respectively.
Source: State Controller's Office, Local Government Reporting Section. (City and county detail shown in the reports, totals upon request from the SCO.)
The largest county in the state -- roughly a quarter of California's population, property wealth, and schoolchildren -- routinely misstates the amount of property tax that actually flows to its schools, as shown below.