GUSD Considers Creating Parcel Tax to Replenish Budget

Gilroy Unified School District board members explored the possibility of putting a parcel tax on the ballot for the June or November elections during a special budget-study session on Thursday night.

The special meeting was scheduled after news broke last week that the district could be facing a $3 million deficit for the 2012-13 school year if it loses full funding from the state for transportation, and Cost-of-Living Adjustments (COLA) for employees.

Announced on Jan. 5, the Governor’s office released a revised budget proposal calling for additional mid-year cuts of $80 million to public schools, and $248 million to transportation. Together, those translate into $673,000 in cuts to the GUSD for the remainder of the 2011-12 school year.

The district currently has eight unpaid furlough days remaining on the school calendar, and it will cost the district over $310,000 for each restored furlough day, according to GUSD Director of Fiscal Services Allan Garde.

Garde presented multi-year budget projections to the board detailing the state’s plan to eliminate full funding for transportation, as well as a 3.1 percent fixed COLA for district employees for the 2012-13 school year. The district would lose just over $1 million from the elimination of transportation funding, which adds up to almost $2 million in lost revenue in total.

California Governor Jerry Brown is heavily pushing for voters to approve a temporary tax on state residents who make more than $250,000 annually. He’s also pushing for an increase in state sales tax in the November election to offset some of the “trigger” cuts in his budget proposal for next year.

District Superintendent Deborah Flores said that staff will learn more about Gov. Brown’s budget proposal after they participate in a school services workshop next week that will be hosted by the state’s Department of Finance. She added that the board will take action at a future meeting in the upcoming weeks.

“It’s been a fast-changing story with the state budget,” Flores said. “Everyday there’s new information.”

Flores also noted that the district will not have more detailed budget plans for next school year until the state releases its budget revision for the 2012-13 school year in May.

In an effort to raise revenue and replenish some lost funds from the state, District Assistant Superintendent Rebecca Wright presented the board with the possibility of bringing a parcel tax to Gilroy voters.

A parcel tax would have to pass with a two-thirds majority vote and could bring in millions to the district over a span of five-to-eight years, she said.

Wright demonstrated that an annual parcel tax to Gilroy residents of $50 could generate $735,000 per year. Seniors aged 65 years and older could be exempt from paying the tax.

She said the board would be able to choose which particular services the generated money from the tax should go toward to offset cuts, but said it would need to be well known to the voting public on where those funds would be spent.

“It’s very flexible money,” Wright said. “It can go toward on-going costs, but needs to be gauged in the community to find out what the purpose of the tax is. The ballot language needs to reflect what you want to spend the money on.”

Wright demonstrated that if the district puts the tax on the ballot for the June 5 presidential primary election, it will go into effect July 1 and generated revenue could go toward cuts for next year. She also cautioned the board to possibly wait until the Nov. 13 general election so the district could have more time to poll the community, write the ballot language and run a campaign.

Wright said another possibility is an Aug. 28 special election that would consist of mail-in voting only, but would be more costly to the district. As of 1983, 54 percent of parcel tax initiatives in the state have passed, she said.

Board Vice-President Jaime Rosso said he would like to see the district work quickly to put the tax initiative on the June ballot because of the overwhelming number of ballot initiatives and propositions that are already slated to appear on the November one.

"November is going to have a whole watershed of initiatives," Rosso said. "We need to give the tax its due diligence and see what it will look like for June, even if we are late to the party."

Board Member Mark Good said that although he believes the parcel tax is a good concept, he fears that Gilroy residents won’t support it because of financial hardships that have plagued the city.

"We are the foreclosure capital of the county," Good said. "And it might be unfair to throw this on the people."

The board will continue to explore the option of a parcel tax at its Feb. 2 meeting and may take possible action to put it on a ballot at that time, Flores said.