By Sara Ballenger
Los Altos School District hopes to become basic aid in 2004-05 school year to get more funding from state
The Los Altos School District not only needs to pass Measure H, a $333 increase in the parcel tax, but also must become a Basic Aid District during the 2004-05 school year to maintain its current educational program with minimal cuts, the district’s Citizen’s Advisory Committee for Finance announced Oct. 7.
Currently, the district is a Revenue Limit District, according to Randy Kenyon, assistant superintendent of business services. The state imposed revenue limits or a cap on general fund revenue per student in 1972.
The district’s current revenue limit is based on the amount of funding in 1972 that voters within each school district within the state had authorized in previous tax elections.
Another factor hurting the district now is the method the state employs to determine how much money to allocate to each district.
The 1976 California Supreme Court decision, Serrano v. Priest, ruled that schools should spend money at the same level to ensure equal educational opportunity for students statewide.
According to the state, to achieve equality of funding among schools, the state calculates the annual inflationary increase at higher levels for low spending districts and lower inflationary increases for higher spending districts.
About 73 percent of the Los Altos district’s funding comes from the state according to Kenyon.
“Our revenue limit is calculated by multiplying the number of students times the per student allocation we get from the state, which increases each year by a cost-of-living increase,” Kenyon said.
The 1978 passage of Proposition 13 also affects the district’s state funding.
Prop. 13 amended the state constitution to limit the rate of local general purpose property tax to 1 percent of the full cash value of the property. Schools could no longer raise funds by raising local tax rates and became more dependent on state funding.
“For a number of years about 80 percent of our revenue limit was made up of property tax collections,” Kenyon said. “Just in the last three years that has grown to where 95 percent of the total comes from property taxes, largely due to housing turnover and the rise in housing prices, which have risen much faster than enrollment growth or cost-of-living increases.”
Key factors in determining a district’s basic aid status, include how fast property values escalate compared to growth in enrollment and cost-of-living increases from the state.
“A district becomes basic aid once the total of its property tax collections exceeds its revenue limit,” Kenyon said. “Our total revenue limit for the current year is estimated at $18 million and our property tax collections are estimated to be about $17 million. The state fills in the last $1 million.”
Kenyon gave the example: if the district’s property tax collections were $19 million and it was defined as a Basic Aid District, it would be able to keep all $19 million in revenue, even though it’s more than its revenue limit. And the district would receive $120 per pupil in baisc aid funding from the state.
The district’s financial committee projects that it will qualify as a Basic Aid District as early as the 2004-05 school year, using the assumption that local property taxes increase 6 percent per year for the next several years, according to the district.
“The benefit grows over time, because the assumption is 6 percent growth in property tax revenues versus only 4 percent growth in revenue limit. Our Citizen’s Advisory Committee for Finance is reviewing that analysis and its assumptions.”
The committee will report to the board of trustees at the Nov. 12 board meeting.
