Proposition A - School Restriction Parcel Tax

What it does

Proposition A is a parcel tax of $198 per year on every parcel of property in San Francisco to support the San Francisco Unified School District. The proceeds would be targeted to improve the quality of teaching in the district, primarily through increases in teacher pay.

The tax would apply both to residential and commercial parcels. A “parcel” of taxable real property is any unit of property in the City and County of San Francisco that receives a separate bill for property taxes from the Tax Collector’s Office. This includes condos, but not tenancies-in-common. In some cases, larger downtown buildings are on multiple parcels and would have to pay the parcel tax for each parcel that receives a property-tax bill. Owners of multifamily properties will pay the tax, but there is no pass-through allowed to renters. Senior citizens are eligible for an exemption from the tax. Under the California Constitution, school districts can levy special taxes if approved by two-thirds of the voters who are registered within that district.

If approved, the tax would be levied beginning July 1, 2008, would last for 20 years and would bring in about $28 million a year, with annual adjustments for inflation. The estimated amount that would be raised under this proposition is about 4 percent to 5 percent of the General Fund of the SFUSD.

Proceeds of the tax could be used to:

• Raise the salaries of teachers and provide retention bonuses so that the SFUSD can compete with other districts for qualified teachers
• Reward teachers working in schools with high teacher turnover and in hard-to-fill subject areas
• Provide additional training to staff, including teachers and paraprofessionals in the Child Development Program and schools from kindergarten through high school
• Provide more competitive compensation and/or benefits to other school personnel
• Develop a Master Teacher program and provide incentives for exceptional teachers to stay in the classroom
• Expand and improve the Peer Assistance and Review program, which provides coaching for new or struggling teachers
• Support best practices at schools through recognition and resources
• Improve academic innovation, technology and support resources
• Allocate a portion of funds, initially $1 million, to public charter schools
• Create an oversight group to make sure that funds are only spent in the manner approved by the voters

Beyond the language written into the ballot measure, the specifics of how money gathered by Proposition A could be used are spelled out in a memorandum of understanding with the teachers’ union. Based on the MOU, the monies from the tax would be allocated as follows:

• 70 percent to teacher salary compensation and professional development
• 30 percent for technology, innovation and equity

If this measure passes, the basic beginning teacher’s salary will be $50,000, an increase from the current $45,000. The maximum teacher salary will become $82,000.

In addition to raising basic teacher salaries, this measure also has the goal of providing a new methodology for “differentiated compensation”. This change would allow the school district to begin to paying teachers different salaries based on the schools they teach at as well as other criteria. This is a major change from the current pay that is based almost entirely on seniority.

The following are some of the examples of differentiated compensation in Prop. A:

• Teachers who teach in less popular or difficult schools would be eligible for incentive pay. This is meant to prevent all the best teachers from choosing to teach at the best-performing schools (which are sometimes the easiest to teach at).
• There would be incentives for teachers of subjects such as science and mathematics, where qualified teachers are hard to find.
• Incentives will be offered to newer teachers to remain in the district. After four years of teaching in the district, teachers would receive a one-time bonus of $2,500. After eight years in the district, they would receive a one-time bonus of $3,000.
• The measure would create a Master Teacher program, in which teaching loads would be reduced by 20 percent so that teachers could spend that time coaching newer teachers. For elementary-school teachers, that would mean one day a week, and for teachers in secondary schools, one less class.
• The current teacher assistance system, called Peer Assistance and Review (PAR), would be modified to ensure higher teacher performance. This program provides additional support and guidance for struggling teachers. The way it is today, struggling teachers can graduate from the program performing only at a basic teaching level. Prop. A would both increase the number of teachers in the program as well as raise the graduation standard to require that teachers graduate at least at a proficient level. Teachers would also not be allowed to re-enter the PAR program. This would give greater impetus to be able to fire an underperforming teacher who is not able to teach at a proficient level.

Entire schools could receive special funds under this measure. Underperforming schools that show the greatest improvement could receive block grants of $30,000.

One million dollars of the total funds would go to public charter schools. There are 10 charter schools in the city today. A Memorandum of Agreement would be created with the district to distribute these funds.

Compliance with the terms of this measure would be provided by an independent oversight committee appointed by the Board of Education, annual reporting to ensure that all funds from the measure are maintained in a special account and used only for the purposes stated in the measure, and annual reports from the district’s chief financial officer to the Board of Education on the amount of the tax collected and the status of projects or programs funded with those tax monies.

Why it is on the ballot

A parcel tax requires a vote of the people, with a two-thirds majority required for passage. Since the passage of Proposition 13 in 1978, local property-tax funds for schools largely have disappeared in California, and the greatest part of school funds comes from the state. The state does not provide adequate resources for education, and the level of funding is very uncertain from one year to the next. This measure is intended to create a local and predictable funding base to supplement state funding.

Parcel taxes are a common way to raise local money in jurisdictions throughout the Bay Area. For example, Oakland, Albany and Kentfield all have school parcel taxes, and other communities such as Berkeley have a parcel tax for libraries. This is the first parcel tax of any kind in San Francisco.

This proposition is part of an overall strategy to provide more local funding for the schools. To date, voters have passed two bond measures — one in November 2003 and another in November 2006 — to provide funds for modernization and compliance with the Americans with Disabilities Act in school buildings. Another bond measure for capital needs is planned for the future. Proposition H, the Public Education Enrichment Fund, which passed in March of 2004, provides money from the city’s General Fund to support arts, music, sports and libraries in the SFUSD.

Pros

Arguments in favor of the measure:

• Prop. A begins to address the growing problem of teachers leaving San Francisco for other districts for higher salaries. By increasing starting teacher salaries as well as providing bonuses for those who stay beyond a particular point, this parcel tax will help attract and retain teachers.
• In addition to augmenting salaries, funds from the parcel tax would bring the district money specifically to support teacher quality. It is widely understood that the single most important factor in assuring acceptable student achievement is teacher quality.
• Prop. A represents a major civil service reform because it creates incentive pay system for teachers who choose to work in underperforming schools. It also provides a higher standard of teaching required of struggling teachers who are recommended for additional support through a peer assistance program.
• The funding for this parcel tax would go directly to the district without the need to pay interest or other charges associated with bond measures. That means that all of the proceeds will be used by the SFUSD.
• The district has done a good job in recent years of overseeing funds. For example, the Citizen Oversight Committee for November 2006’s Proposition A, a bond measure, meets monthly, although it is required to meet only twice a year.

Cons

Arguments against the measure:

• This tax is inequitable because it is a flat rate, which applies without variation to every real estate parcel, large or small, commercial or residential.
• The tax is being levied on less than one-third of all residents in the city, because there is no pass-though to tenants and seniors can be exempted.
• By including an exemption for seniors, the school district will miss out on a significant and growing source of revenue.
• This measure will not provide enough money to solve the problems it is intended to address. If parents and voters do not see improvements in the schools as a result of this parcel tax, they will be less likely to support a subsequent parcel tax that is more appropriately targeted.
• There is little to prevent the school district and the union from redirecting the proceeds of this tax to uses other than the augmenting teacher salaries. In the future, the district and union without voter approval could enter into a new memorandum of understanding to redirect the tax funds among the range of uses specified in Prop. A. While this is unlikely to occur given that here is an oversight committee, the drafting of Prop. A does not bind the district to spend the proceeds only on salaries.
• The measure would provide only a limited amount of support for charter schools.

SPUR’s analysis

Teachers in San Francisco do not receive pay commensurate with their importance to our community. While we see ways in which the parcel tax could have raised more revenue, through capturing a larger number of units in the city or making the flat rate higher, and while we believe that renters as well as owners should share in paying for tax increases, we recognize the challenge of reaching the two-thirds majority needed to pass this measure. A direct tax for teacher salaries is the most precise way to target new revenue without losing a substantial portion of the locally-generated revenue in interest payments. Most importantly, this measure contains the first serious reform of teacher civil service rules in years. On the whole, it will help retain good teachers and improve overall teacher quality.

SPUR recommends a “Yes” vote on Prop. A.