Palo Alto Weekly

News - November 29, 2013

Schools loosen purse strings after property-tax revenue jumps

Years of belt-tightening give way to added staff, raises for teachers

by Chris Kenrick

Palo Alto school officials are loosening the purse strings for the first time in years as a booming real-estate market has boosted property-tax revenues more than 6 percent yearly for two years running.

Without a pay raise since 2008 — except for the automatic, seniority-based "step and column" increases in the union contract — teachers are likely to get two salary hikes this year totaling 7 percent, plus bonuses.

The first, a 3 percent raise plus 1.5 percent bonus, was awarded in May, retroactive to fall 2012. The second — to be voted on next month — gives teachers, staff and administrators an additional 4 percent raise for 2013-14, plus a 2 percent bonus.

In addition, the Board of Education last week approved $1.9 million in new spending under the district's $180 million operating budget, mostly for the hiring of new teachers and technology support.

That comes atop a $2.6 million package of additional spending approved in April, which has gone primarily to boost principals' discretionary funds and add teachers. The district also has set aside $5 million to be spent over three years on professional development for teachers and staff.

The prospective 4-percent raises will cost an ongoing $5 million, according to Cathy Mak, the district's chief budget official.

The raises apply to all teachers, staff and administrators except for Superintendent Kevin Skelly. The board did not propose a raise for Skelly this year but did propose a 3 percent, one-time bonus on his regular pay of $287,163.

The raises, scheduled for a Dec. 10 vote, would bring the salary of an entry-level teacher from $52,965 to $55,083, plus a one-time bonus of $1,059. A mid-career teacher would go from $85,924 to $89,360, plus a one-time bonus of $1,718. The most senior teachers on Palo Alto's salary schedule now earn $106,951, and an additional 4 percent would bring them to $111,229, plus a onetime bonus of $2,139.

In addition to good news on property taxes — which comprise 72 percent of school district revenue — the school district will gain $2.4 million annually for the next six years due to last November's passage of Gov. Jerry Brown's Proposition 30, which boosted state sales tax by 0.25 percent for four years and increased personal income tax of Californians with incomes of more than $250,000 for seven years.

On the other hand, Brown's new Local Control Funding Formula, which shifts state resources toward low-income schools, means an ongoing annual loss of $7.5 million to the Palo Alto district.

State funds now account for only 11 percent of revenue to the school district — slightly lower than the share provided by an annual $613-per-parcel tax, approved by voters in 2010, on residential and commercial property owners.

As a so-called "basic aid" district funded primarily from local resources, Palo Alto does not get revenue on a "per-pupil" basis as most other districts do. Thus, officials are constantly on edge that enrollment growth will outpace revenue growth and cause a drop in per-pupil spending.

However, this has not happened in the past decade except for the years 2010-11 and 2011-12.

"We had some bad years on property taxes and now we have a good one this year, but we don't know how long that cycle will be either," board member Melissa Baten Caswell said at the Nov. 19 meeting.

"We just have to be prudent as we go forward and keep checking and verifying along the way. It would be awful to put things in place and have to pull them out again, so I want to make sure we're making good decisions on additional investment."

Palo Alto remains far better off than the vast majority of California's 1,000 school districts. Per-pupil spending here is between $13,000 and $14,000, compared to a statewide average in recent years hovering around $8,600.

According to a 2012 analysis by the National Journal, California is among the 10 lowest-spending states on a per-pupil basis. Higher-spending states include Vermont ($17,847); New Jersey ($15,116); Connecticut ($13,959); New Hampshire ($13,519) and Massachusetts ($13,361).

Staff Writer Chris Kenrick can be emailed at ckenrick@paweekly.com.

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