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School board holds parcel tax meet

Submitted by on 1, October 15, 2010 – 4:50 am6 Comments

Alameda’s Board of Education reached out to the public on Thursday night to gather input on how to structure the parcel tax they’d like to put on a March ballot – and got some advice on how to get voters to sign off on it.

Trustees Ron Mooney, Mike McMahon and Niel Tam said they’d prefer to move forward on a tax based on building square footage, which district officials said could be considered more equitable than a tax based on the size of a property owner’s lot. But with the first vote on a proposed tax little more than a month away, several other major issues – including the amount of the tax, whether it will have caps, how long it will last and who, if anyone, will be exempt from paying – have yet to be discussed.

Trustee Trish Hererra Spencer asked whether the district could consider a blended tax rate that combines lot and building square footage, as one attendee of Thursday’s meeting suggested. Trustee Tracy Jensen asked if other structures, such as a banded rate that changes as someone’s square footage increases, could be considered so property owners with big lots or industrial buildings don’t get hit with massive tax bills.

Superintendent Kirsten Vital said that if the district were seeking to collect $14 million – an amount she stressed she was using only as an example – they would need to charge 12.3 cents per square foot of lot or 31.7 cents per square foot of building to earn that amount.

McMahon said at a recent candidate forum he would support a tax of 20 cents to 25 cents per square foot of building for the tax, which would replace the district’s existing parcel taxes. But that amount would generate less than the $19 million the district anticipates it will have cut from its budget between this year’s cuts and those to come over the next two years.

Sean Svendsen, who runs Svendsen’s Boat Works, asked the board to consider capping the tax rate. He said Measure H – which is capped – increased his family business’s taxes by more than $30,000 a year, forcing him to let an employee go. Without a cap, he said his parcel tax bill would be $120,000 a year under the example Vital offered.

“I know that there’s a lot of people out here that want to tax the Safeways and the South Shore centers and the Trader Joes,” Svendsen said, referring to some property owners’ concerns that the Measure H cap favors Alameda Towne Centre. “If the goal is to go after the big corporate conglomerates, you are risking the livelihoods of many, many people, including me and my employees. The impact would be catastrophic without a cap.”

Alex Halperin asked if the board could consider a blended tax rate or a graduated rate that would protect businesses like Svendsen’s – and help get a tax passed.

“It seems pretty clear to me that we need to come up with a system that is going to address some of these outlier cases so people can’t wave their hands and say, ‘Look at this really unfair thing they created’ and use that as a weapon against the parcel tax,” Halperin said.

Speakers asked the board to consider other taxing options, including a payroll tax or an increase to property owners’ regular tax bill – options the district is legally barred from pursuing.

Some of the meeting’s roughly 60 attendees also said the district will need to do a better job of explaining why the district is facing the financial difficulties it’s facing, what the money collected through a parcel tax will pay for – and what the district will need to cut if a replacement tax isn’t passed.

“It seems like there’s a lot of confusion, and a lot people making up things and scaring people. I hear a lot of people make assertions, and they don’t back it up. And that just adds to the mess we’re in,” Charles Liuson said.

Liuson was one of several parents who got up to speak after a woman chastised trustees for failing to plan for a loss of state funds and to explain what they would do with money from a replacement tax.

Vital said the district lost $10 million in state funding over the last two years. “In California, we have not gone through what we’re going through right now since probably 1991-1992,” she said.

The board is slated to talk about what programs a parcel tax would fund at its October 26 meeting. District staff will make a recommendation on how a tax should be structured on November 9, and a final vote on putting a tax on the ballot is slated for November 30.

The district is seeking a tax to replace its existing Measure A and Measure H parcel taxes, both of which sunset at the end of 2012, and to help it fill a budget gap that will grow to $19 million by that date.

The school board cut $7.2 million this year, raising class sizes and cutting a week out of the school year after voters rejected the Measure E replacement parcel tax in June. District officials said they are looking at up to $5 million in cuts for next year and another $7 million in 2012 if its existing taxes lapse without a replacement.

Meanwhile, the district plans to start posting answers to parcel tax questions on their website, a process they hope will begin today.

6 Comments »

  • David Howard says:

    Here’s a perfect example of where the City of Alameda and AUSD could work together to resolve an issue.

    Federal and municipal owned land is not taxable, but through the California State Board of Equalization principle of “possessory interest,” tenants (i.e. businesses) that lease such land ARE taxable.

    As it stands now, for-profit businesses in City-owned land, like Burgermeister, Alameda Wine Co., Alameda Theater, don’t pay the parcel tax, and for-profit businesses at Alameda Point, like Hangar One Vodka, don’t pay the parcel tax.

    The City of Alameda and AUSD need to work together to make sure that those businesses pay their fair share, and pay the parcel tax. By capturing the tax from more property, the nominal tax rate would be lower, and owners like Svendsen probably wouldn’t feel they need a cap. It was Svendsen, by the way, who collapsed two adjacent parcels into a single parcel to minimize his parcel tax contribution under Measure H. Once he collapsed to a single parcel, that parcel was capped, and his tax was reduced. Therein lies one of the pitfalls of a cap.

    Ask your favorite City Council candidate what, if anything, they are doing, or would do, to enable AUSD to apply the parcel tax to for-profit businesses in City-owned land or leasing space at Alameda Point. They need to examine ways to structure their leases to make sure that possessory interest applies, and they need to identify the properties for AUSD to send tax bills to.

    • David,

      Superintendent Vital spoke to this at last night’s meeting – they are actually working on this. General Counsel Danielle Houck said, if I got it right, that they need to get the county assessor to take a property out of tax-exempt status in order for them to be able to charge taxes on it, and that it would take a lot of individual investigation to find those properties in the first place.

  • David Howard says:

    It’s not that much work – Alamedans for Fair Taxation has already identified many of the properties in their database by street address and APN. (below.)

    AUSD is still paying big $ to that consultant, SCI, for summary reports of taxable land, without getting a comparable parcel-by-parcel list of all the properties in Alameda.

    Here is AFT’s list:
    http://www.action-alameda-news.com/wp-content/uploads/2010/09/Public-Parcel-File-9-20.xlsx

    Identifying properties? Angela’s Bistro, Alameda Theater, Burgermeister, Alameda Wine company – there, I’ve identified for for-profit businesses right there. I believe the storefront on Park Street next door to Peet’s is City-owned as well, the one that used to have Reboks in it. I remember seeing a City notice of space for lease about a month ago.

    As for Alameda Point, the City keeps leases with all those businesses out there. They just need to go through PM Realty’s records of leases (PM Realty manages them) to identify the tenants, street addresses, and I’m sure the leases have specifics on the number of square feet being leased and so on. I know that the lease for Angela’s Bistro does, because I got a copy of that lease a couple of years back through a public records request.

    You want a list? Rock Wall Wine Company, Hangar One Vodka, Delphi Productions, The Bladium, The Forgeworks, John Callahan piano restoration, NRC, Alameda AeroSpace, Alameda Point Storage…there’s a start. It’s not hard.

    The District needs to stop making “But it’s so hard!” excuses.

  • Publius says:

    The state BOE might think it can tax possessory interests on federal land, but they can’t. Check your own attachment re: federal enclaves. After that, brush up on the nearly two centuries of precedents, laws etc since the McCulloch decision.

  • David Howard says:

    On the face of it, it doesn’t look like the federal government has exclusive jurisdiction over Alameda Point. They have signed a Lease in furtherance of conveyance (LIFOC) that gives the City of Alameda jurisdiction to sub-lease the buildings to other tenants. PM Realty, on contract to the City of Alameda/Alameda Reuse and Redevelopment Authority, manages the leasing at Alameda Point.

    http://www.boe.ca.gov/proptaxes/pdf/660_0091.pdf

    The point is that a) the public hasn’t known that there are a bunch of businesses in Alameda not paying the parcel tax, b) the District may be leaving money on the table and c) it needs to be examined by the City and AUSD. It’s not going to be resolved in this forum.

  • Mark Irons says:

    It’s great to capture this additional money if possible, but I think it’s more than premature to speculate that it would increase the total taxable sq feet enough that a cap would not be necessary to protect a business like Svendson’s.

    I credit David Howard for finally doing something which is possibly more helpful than divisive, but if doing the math is so darn easy, do it already and don’t speculate.

    I did the math on our home and at 12.3 cents our lot would tax out at $473 and at 31.7 cents the building would pay $665. Intuitively one suspects all possible forms of taxation will have winners and losers, though some may seem fairer than others depending on one’s perspective. There is no perfectly fair structure.

    What I wish we could all agree on is the essential nature of quality public education, that relative to the state and nation AUSD is doing an amazing job with damn little resources, that we can’t sustain this level of education without taxing ourselves, and whether having to apply a parcel tax is fair or not, because of prop 13 (which itself can also be sliced and diced with regard to it’s fairness and efficacy) we have little choice.

    The following is hypothetical but, if somebody who owns a condo and would vote for being taxed $400 under 31.7 cents for a building because it’s “fair” but would reject Measure E, I’m not that sympathetic that they apparently see keeping that $259 on principle as being more important than the long term negative impact of severely underfunded public education.

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