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Orange County

Over $560,000,000 of Orange County property taxes allocated to education are taken to fund State obligations each year. 


This includes the entire county-wide Educational Revenue Augmentation Fund (which supplements the county’s low-wealth districts), plus $80 million a year of property tax directly allocated to specific school districts and $12 million directly allocated to community college districts.


In common with most counties, the burden of providing this property tax – then dealing with its deferred repayment – tends to fall hardest on districts with a high proportion of at-risk students.  Santa Ana, Garden Grove, Anaheim High, and Magnolia Elementary each had over 20% of their 2011-12 revenue come in after the last child had left for the summer.




Districts in blue receive only “basic aid” from the State and are allowed to retain all their property taxes.

Detailed Information:


In Orange County, at least $563,623,874 was taken out of school-allocated property taxes to pay State obligations in 2010-2011. More than $446,363,323 was redirected to satisfy the State's VLF backfill obligation, and over $117,260,551 was redirected to pay for the State's 2004 Economic Recovery Bonds. (Incomplete information was filed in Sacramento by Orange County receiving entities.)


In 2011-12, this diversion grew to $650,266,848 ($522,990,716 and $127,276,132, respectively) of school-allocated property taxes. 


Source: State Controller's Office, Local Government Reporting Section. (City and county detail shown in the reports, totals upon request from the SCO.)




Orange County schools did not receive $288,122,773 of their state funding until after the 2010-11 school year was over -- half of the redirected property tax. The delayed payments grew to $415,015,167 for the 2011-12 school year, before declining (thanks to Prop 30) to $196,147,290 this past summer.


Of the money taken from all local school-allotted property tax in 2011-12, $79,912,008 was taken from the K-12 schools’ base property tax allocation, after all the county’s Educational Revenue Augmentation Fund had been emptied.


In the current 2013-14 school year, already $165,621,910 of deferrals have been announced for Orange County K-12 school districts.  An additional $78 million for Orange County is on the books (Ed Code Sec. 14041.6) and will probably be announced with the Second Principal Apportionment in June.  Orange County community colleges (with the exception of South Orange) will suffer deferrals of over $40 million.  At a district level, already announced are $29.7 million in late payments for Santa Ana Unified, $22.8 million for Garden Grove Unified, $19.0 million for Anaheim Union High, $8.7 million for Capistrano Unified, $7.9 for Placentia-Yorba Linda Unified, $6.3 million for Saddleback Valley Unifed, and $5.7 for Tustin Unified.  Deferrals for other districts may be found in the First Principal Apportionment Monthly Payment Schedule at the CDE website.


Sources: For deferrals, see the Funding Excel Files - First and Second Principal Apportionments from the California Dept. of Education; for “negative ERAF” -- monies taken from principal apportionments, see from the CA Dept. of Education. 



Background on Orange County and Property Tax:


When Proposition 13 was passed in 1978, the county government of Orange County (separate from its cities, schools, and other local services) was not funded by property tax. Somehow, this caught the county government in a Catch-22 whereby it didn't receive a proportionate share of property tax, nor was it allowed to continue to collect its prior sources of revenue. Things have been chaotic ever since. Even more frustrating have been the times they look over the fence at their Los Angeles County neighbor, where county government grabbed over half of the total property tax pie, leaving schools with one of the lowest allocations in the state. Thus, Orange County feels that it's having to disproportionately support its own schools, whilst also funding Los Angeles'. It is not surprising, therefore, that when Orange  shows its graphs, it does so correctly (with 16% of local property taxes going to satisfy the state's VLF and Triple Flip obligations to the county and cities):

However, the explanation that goes with the graph perpetuates the myth that the state reliably and promptly backfills the borrowings.

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