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Court Decision Strikes Down Aspects of School Parcel Tax Charging Properties at Different Rates

By Jeff Hudson - December 13, 2012

A state court of appeals issued a decision last week striking down portions of a voter-approved school parcel tax in the Alameda Unified School District in Alameda County.

The 37-page decision released on December 6  could have implications for other California school districts that currently have voter approved parcel taxes, or have parcel tax elections pending in coming months.

A three-judge panel of the First District Court of Appeal unanimously struck down portions of the parcel tax authorized under Measure H (approved by voters in 2008) that imposed different tax rates upon residential parcels and commercial/industrial parcels – reversing an earlier decision by a lower court, which had upheld the Alameda Unified parcel tax. The parcel tax, as approved by voters, charged residential parcels $120 per year per parcel for a four year period, and also charged different rates for different kinds of commercial and industrial properties, with small parcels paying a flat $120 per year per parcel, and larger parcels being charged 15 cents per square foot (up to a cap of $9,500).

The appellate judges ruled that state law did not allow the district to charge different rates for different categories of commercial/industrial property. But the decision let stand provisions of the parcel tax that allow for senior citizens and disabled persons, and also said that the school district could charge all property owners the same $120 per parcel that homeowners and smaller commercial properties paid.

David Brillant, the attorney representing George Borikas and others who brought the suit against the Alameda school district challenging the parcel tax, said “We always believed that a tax has to be ‘applied uniformly’ to all taxpayers, regardless of the type of property they owned. Districts, including the Alameda Unified School District, which have enacted or proposed taxes that classify taxpayers into categories with different rates are now on notice that those structures are illegal under California law.”

Superintendent Kirsten Vital of Alameda Unified said “If the trial court orders refunds of tax revenues already collected and spent, this decision has the potential to be a significant blow to our budget with many negative consequences for our students, teachers and staff. The decision also has significant public policy and budget implications for districts across the state.”

The Alameda Unified district is reportedly in conversation with State Sen. Loni Hancock (D-Oakland) about possible emergency legislation that might make changes to the law governing school district parcel taxes.

The decision in the Alameda Unified cast prompted swift action on the part of the nearby Piedmont Unified School District. On Tuesday (Dec. 11), the Piedmont Unified school board held a special meeting and unanimously approved an amended ballot measure that will be placed before voters in a special election on March 5. The amended ballot measure would replace the current school parcel tax structure with a flat rate tax (consistent with the decision in the Alameda Unified case), which would go into effect in July 2013 and remain in place through June 2021. School board members reportedly expressed regret that the amended measure (known as Measure A) would place an extra burden on owners of smaller parcels, but they wanted the Piedmont district to be in compliance with the appeals court ruling.
Other school districts are believed to be evaluating recently approved or pending parcel tax proposals with an eye toward possible revision.

About 245 California school districts have (or have had) some form of voter-approved parcel tax. Typically, districts with parcel taxes are found in coastal counties, affluent suburbs and/or university towns -- communities in which a high percentage of voters are college-educated, and willing to approve supplemental local funding in support of classroom education programs. Currently school parcel tax measures require a two-thirds majority in an election for approval, though there is pending legislation that would lower that threshold to 55 percent (see article elsewhere in this week’s EdBrief).

Editor's Note:  Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writer in print, radio and television media.