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Title and Summary from the Attorney General


SCHOOL FUNDING. PROPERTY TAX REVENUES. INITIATIVE CONSTITUTIONAL AND STATUTORY AMENDMENT. Prohibits state from redirecting or reducing the allocation of local property tax revenues designated for K-12 public schools and community college districts. Requires state to use its general fund instead of these local property tax revenues to compensate cities and counties for their reduced vehicle license fee revenue when the fee is set below 2 percent of vehicle market value. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Net decrease in city and county revenue of about $2.5 billion per year, beginning in 2015-16. Uncertain impact on annual state costs ranging from savings of a few billion dollars to costs of a few billion dollars, beginning in 2015-16. Possible increase in school and community college funding. (13-0047.)


Note from Educate Our State regarding Title and summary: 

"The $2.5 billion is the excess that local governments have been getting -- above and beyond what was owed.  It will revert to the general fund, where the Legislature can distribute it back to cities and counties. The good news is that all these expenses and revenue flows will be transparent."

Detailed Fiscal Analysis from the Legislative Analyst's Office

Please read the Legislative Analyst Office's detailed analysis, "Fiscal Impact Estimate: Initiative 13-0047 A2S," to understand the specific, complementary cash flows -- any loss to cities and counties is available to the Legislature to redirect to cities and counties.  However, in a Proposition 98 Test 3B year, the available funds may be reduced by an (accidental) actual funding gain to education.  Our goal continues to be revenue neutrality -- getting schools the income they're promised reliably (rather than the usual fighting for more unreliable income) -- however, this surprising finding by the Legislative Analyst's Office alerted us to the fact that schools have lost out every Test 3B year since 2004 that the VLF Swap has grown.



Up For a Mind Exercise?


Puzzled how this can be?  The Legislative Analyst's Office explains this more clearly in its Fiscal Analysis for a later initiative (#13-0065) that is trying to reinstate Redevelopment Agencies with fewer (?!) restrictions than before.  Mentally substitute "Vehicle License Fee Swap" for "RDAs" and double every number (since the VLF Swap is already $6.8 BILLION a year) and you'll understand how it has been hurting public school education in California every Test 1 and Test 3 year in the past decade!  (How many of the ten has this been?  Well, Prop 98 was suspended in 2004-05 and 2010-11, then in Test 1 in 2011-12, and in Test 3 in 2006-07, 2007-08, and 2008-09.  So there has been a real chance of harm in six of the ten years during which Proposition 98 "guaranteed" schools would not be harmed.)  Some guarantee.

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