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SCHOOL FUNDING SUIT: ‘Death by a thousand cuts’

Submitted by on 1, October 12, 2010 – 4:50 am13 Comments

Some 200 people packed the Lum Elementary School cafeteria on February 8, 2007, hoping to find a solution to the Alameda Unified School District’s seemingly permanent budget crisis.

The school district was in its sixth consecutive year of budget reductions, and administrators had readied a fresh list of cuts for a seventh. Just 20 months earlier, parents had succeeded in persuading voters to increase the district’s existing parcel tax by more than 50 percent. But it had not been enough to cover growing costs and an ongoing loss of state funding, which for Alameda was already less than what surrounding districts received.

“It was just, ‘another million dollars, another million dollars,’” now-school board president Ron Mooney, who had headed the successful 2005 parcel tax campaign and helped organize the meeting, said of the ongoing budget cuts.

The bulk of the district’s funding was predicated on a formula that had been generated some 35 years earlier – a formula that was based in part on the presence of the Alameda Naval Air Station and the millions of dollars the federal government provided to Alameda Unified as a result. But the money disappeared after the Navy base closed in 1997, and the state – which provides nearly three-quarters of the district’s funding – had not replaced it. To do that would have meant taking money away from other school districts – a political non-starter.

“Tax yourselves,” a prominent local teacher-turned-legislator had by several accounts told local school board members on a 2001 Sacramento visit.

By the end of the meeting, participants had split into groups. Some pursued fundraising efforts, which never really got off the ground. Others focused on lawmakers, in the hope that Sacramento would fix the problem.

“The political rallies in Sacramento – that just never went anywhere,” teacher and attorney Rob Siltanen said.

Siltanen and another former lawyer-turned-high school teacher quietly pursued a third strategy for fixing the district’s money problems, one that earned Alameda a starring role in a statewide effort that many hope will finally fix California’s broken school finance system. They looked into whether Alameda Unified could file a suit that would force lawmakers to give the district more money – or perhaps, to change the way California doles out school funding altogether.

On May 20, Superintendent Kirsten Vital announced that Alameda Unified was part of a coalition of school districts, families and education groups suing the state. The suit, whose named plaintiff is an Alameda High School student, claims California’s school finance system is unconstitutional, and it seeks a legislative do-over.

The suit says California has set rigorous standards governing what schools will teach and an assessment program to measure progress, but lawmakers haven’t provided the resources needed to meet them. It doesn’t ask for money specifically, though the suit’s proponents believe that both reforms and funding are needed.

Attorney General Jerry Brown wants the court to drop the case, saying it is not their place to tell lawmakers to create a new school finance system and that the plaintiffs have failed to show the system has harmed them. A hearing on that request is set for December 10.

Bill Koski, an education scholar and one of the attorneys handling the case, is confident he’ll prevail in court. He said Alameda – with its small administrative office, diverse student population and test scores that exceed state standards – offered attorneys a prime example of a school district run as well as the state’s dysfunctional funding system allows.

“Alameda is a poster child of a district working very hard for limited resources and doing the best that it can, but not being able to provide the services it knows it should,” Koski said.

Origins of a lawsuit

Siltanen learned early in his law career that he wasn’t cut out for the adversarial nature of that profession. So he turned to a life in the classroom instead. He said he wanted to build and improve instead of advocate and fight, though the latter, he said, is sometimes necessary. Siltanen and his two children are plaintiffs in the suit.

Siltanen, who lives in the West End home his grandparents occupied when the Navy’s jets were still flying overhead, has seen the impacts of California’s broken school finance system as a parent, teacher and school administrator.

“Honestly, the scope and depth of the cuts are so enormous and the impact(s) are so serious and so sad that I hesitate to single out one or two specific examples as having a greater impact on kids than any others,” he said when asked for examples. “The promise of equal opportunity for all through public education is suffering death by a thousand cuts in California generally and in Alameda specifically.”

Siltanen has been relentless in his service to local schools, earning Alameda County Teacher of the Year honors for his work inside the classroom and the undying regard of school advocates outside it. (He just signed on to coordinate a new parcel tax campaign.) And by all accounts, the Dartmouth and Boalt Hall grad funneled that intense energy into finding out whether Alameda Unified could make a legal case. He and Ann Casper, a fellow parent, teacher and former lawyer, began researching case law and contacting some of the state’s top attorneys and education scholars for advice.

Siltanen and Casper found they had lots of company in their quest to determine whether suing the state was the best path to fixing California’s school finance system. Koski, for one, had tired of winning court victories that the poor school districts he was fighting lacked the money to fulfill.

The California School Boards Association had been looking into it, too. The association had been involved in the Williams lawsuit, a 2000 case that forced the state to provide nearly $1 billion for safe facilities, instructional materials and qualified teachers. And it was looking for opportunities to address other school issues, particularly funding, attorney Abe Hajela said.

Siltanen presented an eight-page report to the school board in June 2007. He said a suit would be viable, but the barriers to filing one would be “massive” and even if they could be overcome, a suit wouldn’t provide a quick solution to Alameda’s budget woes. Similar suits had prodded legislatures in several states – Kansas, Montana, New York, Texas, North Carolina – to fix their own school finance issues. But the process of pressing such a case here could take as long as 12 years to complete, without any guarantee of victory.

Siltanen also said the experts he consulted had told him the climate might not yet be right for a lawsuit. Governor Arnold Schwarzenegger had declared that 2008 would be the year of education reform, and they were hopeful a legislative solution to the problems could be reached. Nevertheless, he suggested the school district continue working on the “litigation project” for another six to eight months.

“By February or March 2008 at the latest (and probably much sooner), we will have a good idea of what is likely to happen or not happen with our Governor and the so-called year of education reform,” he wrote.

A fiscal Frankenstein

California’s method of paying for public education is perhaps one of the most complex in the nation, a sort of fiscal Frankenstein that state lawmakers have tweaked and tacked on to over the course of four decades.

California’s schools, once the envy of the nation, had been largely funded through property taxes that were controlled locally. But in 1971, attorneys representing a Los Angeles parent named John Serrano convinced the California Supreme Court that the system was grossly unfair to students in poorer cities and that state lawmakers needed to fix it, setting local schools on a path toward state control.

Legislators began setting “revenue limits” – ceilings on the amount school districts could spend on each student – based on spending patterns already in place. After losing a second suit, they started increasing the limits at different rates to equalize spending. But in 1978 California’s voters passed Proposition 13, which capped property taxes and rolled them back to earlier levels, cutting local school districts’ property tax revenues by 60 percent. The measure also increased the percentage of voter assent required to collect additional taxes from a simple majority to two-thirds.

Sacramento, which was sitting on a $5 billion surplus when Proposition 13 passed, stepped in to fill the gap – a role they retain to this day. But much of the funding they provide comes from sales and income taxes, which change dramatically from year to year – making it impossible for districts to plot out services even a year ahead. Alameda’s school board, for example, has to issue layoff warnings to teachers and staff in mid-March, months before they know how much money the state will provide. They are legally required to approve a budget on June 30 regardless of what happens in Sacramento, and to show they can balance their budget three years out – even though they could be dealt funding cuts long after their budgets are approved.

In response to declining funding and an explosion in California’s student population, voters passed Proposition 98 in 1988, which requires lawmakers to set aside a certain percentage of their budget for schools. Even with that, California was 44th out of 50 states in per-student funding in 2008-2009, according to the National Education Association.

Meanwhile, some argue the inequities John Serrano sought to eliminate are still firmly in place. Alameda Unified received $6,106 per student for general education expenses in 2008-2009, the lowest amount in Alameda County, numbers reported by the Alameda County Office of Education show, while Dublin Unified got $7,009 per student. Statewide, the per-student allotments varied by as much as $3,871 per district in 2005-2006, a report generated in March by the Public Policy Institute of California showed.

Another problem, the suit’s proponents said, is the tortured path the money takes from the state Capitol to local school districts. The “revenue limit” for each district is now calculated using 19 separate adjustments. And the percentage of funding Sacramento has allowed local school districts to use for general expenses has shrunk over the years, as lawmakers shoveled cash into a growing number of “categorical” programs targeted to specific populations and problems. Before Proposition 13, categorical programs accounted for 10 percent of a school district’s budget; now they make up 30 percent of the budget, and each comes with its own set of rules.

Today, California has more students per teacher than every state but one, and fewer librarians, administrators, guidance counselors and instructional aides than most other states, the suit’s proponents claim. California’s students post some of the country’s lowest scores on standardized reading and math tests.

Former Alameda Unified Superintendent Ardella Dailey, who began her career with the school district in 1985, said she was “deeply involved” with district budget cuts and program reductions that began in the 1990s. Art and music and counseling were some of the first programs to be cut. Then the district cut the number of languages it offered at middle schools and trimmed extracurricular activities at middle and high schools. Then middle school sports disappeared. Dailey also had to cut professional development programs in reading and math, even as the state set proficiency in those programs as priorities.

“When I was in the superintendent’s seat, I saw the patchwork effect of, ‘cut here, cut here,’” said Dailey, who now volunteers on the board of the new Academy of Alameda Middle School charter.

Parents like Mike Robles-Wong saw the impacts, too. Robles-Wong, whose daughter, Maya, is the named plaintiff in the suit, began volunteering at Bay Farm Elementary in 2005. He said he became the go-to dad, organizing math homework and classroom projects and leading reading exercises.

“I found myself doing the sorts of things that, honestly, a teacher’s aide should have been doing,” he said. Meanwhile, the school’s PTA “was constantly asking for money for this and for that.”

Robles-Wong said he found the curriculum in a Mexican school where he worked for a month much more rigorous than what he saw here, and he worked to introduce a similar level of education to his daughters, paying for outside tutoring and athletic activities.

Experiences and conversations he’d had over the years had convinced Robles-Wong that the consequences of not doing so were dire. Public agencies he had worked for routinely swiped employees who’d come from out of the country because they were better trained, he said. A professor from a Bay Area law school told Robles-Wong that he could tell which of his students were from California and which were not, he said: Students from California were always the least prepared.

Sacramento passes, reforms fail

The spring of 2008 was a heady time both for schools advocates and parents from Alameda and across the state who caravanned to Sacramento in school buses, demanding legislators fix their schools.  As local parents and students drew media attention with protests against school budget cuts – and ultimately, worked to pass another parcel tax – Schwarzenegger’s bipartisan Committee on Education Excellence released a series of recommendations for fixing California’s school system, which the governor had acknowledged was broken and said was his top priority.

But the state’s economy crashed, and the reforms never materialized. “The politicians were no longer in a position to deal with the problem,” the school boards association’s Hajela said.

Schwarzenegger’s committee had hoped that flattening school enrollment would provide about $5 billion by 2011, which would allow them to shuffle money where it needed to go without taking cash away from better-paid districts. Instead, the state was facing a $16 billion deficit.

“We just thought how lucky we were that this was going to be the time that finally, education finance in this state would be adjusted and be fixed and be fair. And there was just no will with the terrible cuts that were going to be made,” said Dede Alpert, vice chair of the governor’s committee and a former state senator from San Diego whose Senate stint included efforts to reform the system.

Alpert said that while Schwarzenegger supported the committee’s work, he was unwilling to expend the political capital needed to make the reforms. “I’ve always felt with all education reform that you have to have a champion,” she said. (Another of the committee’s members, ACLU general counsel Mark Rosenbaum, is part of a second school funding suit filed in July.)

Siltanen and Casper had provided a second report to Alameda’s school board in February 2008, saying they were working to secure free representation from a leading law firm. Koski said the suit finally coalesced in the six months before it was filed.

A Schwarzenegger spokesman declined to answer specific questions about the lack of reforms. Spokesman Matt Connelly offered only a brief statement saying that the governor is willing to talk with the plaintiffs in the suit, that money alone won’t solve the problem and that “extensive and systemic reforms” are needed.

Local legislators said they’ve moved to reduce the number of categorical programs. But with a two-thirds vote needed to pass a budget and Republicans saying they won’t increase taxes, they can’t get the additional funding they believe is needed to make fixes. They said voters need to fix the problems by rethinking Proposition 13.

“At some point, we need to be brave enough to be honest with ourselves about where we are. Right now we have underfunded all our systems so much that we’re in danger of becoming a third-rate place to live,” said state Senator Loni Hancock, D-Berkeley, who said she welcomes the lawsuits.

Alpert said that entrenched interests whose jobs were funded by the programs often impeded those changes. She also accused Democrats of playing “school board in the sky” and blocking changes that would give locals more control over spending, out of concerns districts “wouldn’t do right by various populations.”

“That is a poor excuse. If we’re going to wait for Proposition 13 change to do anything, I’m not going to be alive,” she said. “We are at the bottom of the barrel. And if you don’t do something, the very child you are trying to help will have finished school, and you’ll never have made an improvement of the system. People don’t seem to see the immediacy of it.”


In late June, Alameda’s school board okayed $7.2 million in cuts after voters rejected the district’s fourth parcel tax request in less than a decade, this one for nearly twice the $7.3 million they now collect. Despite winning the approval of more than 65 percent of voters, the tax failed by around 250 votes.

School board trustees are now making plans to close more than half the district’s schools over the next two years – which still won’t cover additional budget cuts estimated at up to $13 million through 2013. They are also considering a fresh parcel tax for a March ballot, but even that may not cover all the losses the district is facing.

“I got used to saying we cut $7 million in seven years. It would be nice to only say, we’re (making a) $1 million cut this year,” school board president Mooney said during a recent board meeting.

California’s 2010-2011 budget, which lawmakers approved on October 8 – about a third of the way into the state’s fiscal year – suspends the Proposition 98 funding guarantee and freezes funding for schools. If the guarantee were met, California’s schools would be getting an additional $4.1 billion this year. The state will also defer $1.9 billion in payments schools would have received in the spring of 2011 until the start of its next fiscal year in July in order to help cover its own $19 billion funding shortfall. Lawmakers are also using a spate of one-time federal funds to help pay for schools.

Though he switched careers to avoid courtroom battles, Siltanen said he will continue to fight to restore what he believes is the promise of a California education.

“It does provide hope at a pretty dark hour for education,” Siltanen said of the suit. “I don’t know what the outcome will be. It will be better, though.”


  • Lauren Do says:

    Really excellent Michele, that is — bar none — your finest piece to date.

    Thank you.

  • LSnow says:

    Incredibly well written and well researched article, thank you Michelle!

  • anotherfrank says:

    This is the BEST that I have seen!!!

  • Jon Spangler says:

    Michele, this is a terrific clarification of just what is going on in our schools and why a lawsuit may be our only hope. If AUSD had just *half* of the gap between Dublin’s per-pupil contribution and our existing share we would have another $4 million per year…
    (9000 students x $900/student/year = $8.1 million)

  • Tony Daysog says:

    My campaign for mayor is about getting Alameda Point going. “Getting Alameda Point going” is a matter as vital to our school district and school children as it is to all residents in general.

    The reason Alameda’s revenue-limit formula has been so low is intimately tied to the former military base. Compared to other places, the revenue-limit was set low in the 1970s because because the Navy had been supplementing the District’s budget.

    As a youngster going through our schools in the 1970s and early 1980s from elementary to high school, each year kids would fill out forms that the Navy would then use to compensate the cost of educating Navy kids. The compensation was such that it was large enough not just to cover the cost of educating Navy kids, but also large enough to help the school district out overall.

    When the military base closed and the Navy left, that supplemental Navy money went with them, although AUSD was still stuck at the low 1970s-era base revenue limit. That’s the larger, **structural** reason why the District is always behind the funding curve — closure of the Navy base.

    Getting Alameda Point developed along the lines I envision can help AUSD in several ways. In a nutshell, I am championing an approach where we, the City of Alameda, renew efforts to find the **right** private sector developer (or developers), who will help us transform Alameda Point into an amenity-rich mixed-use community, starting with building of a **reasonable** amount of stylish multi-family housing for seniors a la Independence Plaza, Bayport-style homes for families with school-age children, and townhouses, lofts for young adults, who, overtime, will move up the housing ladder.

    BENEFIT: This approach would re-populate West End schools, allowing the AUSD generate state funds that not only pays for the cost of educating West End kids in West End schools but also includes an overhead amount that applies District-wide, for schools outside of the West End as well.

    BENEFIT: This approach also generates what are called “pass through” revenues. The bulk of property taxes generated at Alameda Point will be captured by what is called a “redevelopment agency,” and, without going into technical details, an amount of the property taxes going to the redevelopment agency will be “passed through” to taxing entities, including the AUSD. The city estimates a redeveloped Alameda Point will generate $4 million annually for our schools, an amount that does not include add-on taxes, such as Measure H revenues.

    BENEFIT: Other ideas I would pursue is sharing sales taxes generated by the future Alameda Landing shopping center. I estimate conservatively that the shopping would generate roughly $700,000 in sales taxes. Since the bulk of sales and sales taxes are due to spending by Alameda parents of school-age children, to me it seems there is cause for sharing a portion of Alameda Landing’s future sales taxes with the school district.

    BENEFIT: Perhaps the most complex funding strategy I would pursue is working with state legislators to craft special legislation that allows Alameda Point to divert a greater share of property taxes generated there to our schools.

    As I said above, the bulk of property taxes will be captured by the redevelopment agency, i.e City Hall. The vast bulk of captured property taxes at Alameda Point (technical term is “property tax increment”) can only be used for purposes improving the area’s infrastructure or beautifying the area. That’s how “redevelopment works”: City Hall designates an area as a “redevelopment area” and then captures practically all “new ad valorem taxes” (captured taxes is also referred to as “tax increment”) generated **after** creation of the redevelopment area, to service debt (i.e. redevelopment tax increment financing) issued to beautify an area and improve infrastructure. The ad valorem property taxes generated **before** creation of the redevelopment area continue to go to taxing entities, such as BART, the mosquito abatement, etc., etc.

    What is unique about Alameda Point is that it is one of the only redevelopment areas in all of California where **all** ad valorem property taxes generated will be captured by the redevelopment agency. That’s because we established the redevelopment area at a time when there was/is no taxing entities getting property taxes from Alameda Point. (To be sure: redevelopment law specifies a “pass through” of future tax increment I referenced above to taxing entities — but as a ratio of total Alameda Point tax increment, pass-through are small, even if the AP redevelopment would generated up to $4 million annual in pass-throughs to AUSD).

    So, in the same way the military base when it was open was a source of funds for the District as a whole, why not pursue special legislation that allows AUSD to tap into a greater share of future tax increment, the bulk of which is being captured by the redevelopment agency for specific capital-cost purposes only?

    In a way, the “special legislation” I am contemplating is nothing other than the creation of a ERAF **specifically designed** for AUSD and the City of Alameda. ERAF is acronym for state legislation began in the early 1990s, whereby the state legally took redevelopment dollars from redevelopment agencies across the state and transferred those dollars to . . . . schools! City Halls and redevelopment agencies hated ERAF . . . but for the state, there was little or no other way of making the schools whole while trying to balance the budgets. If special legislation is adopted, call this idea a “mini-ERAF” we would impose on ourselves, subject to certain clear understanding with respect to making sure we have enough redevelopment dollars to achieve our Alameda Point vision. We would also have to generate wiggle-room (i.e. cushion) to create a safe margin of error, in the event the state wants to continue stealing from redevelopment agencies (i.e. Paul) to fund schools (i.e. Peter).

    This special legislation would be a medium- to long-term approach. In the mean time, we need to continue with stop-gap measures like Measure H, Measure E, and son of Measure E.

    But, the long and the short of it is this, and this is a serious matter: all that I wrote of above can only happen when we begin to work with the right private sector developer (not SunCal) to begin placing properties there onto the tax rolls through a well-planned strategy of redeveloping Alameda Point as a stylish, upscale community for new residents and quality, non-polluting-industries with career-track jobs.

    Thank you. /s/ Tony Daysog, candidate for Mayor

  • Marilyn Schumacher says:

    Rob Siltanen and the legal eagle team rock.

    But I’m not a fan of candidates running for city positions (not to be confused with the school board) who say one thing, do nothing, or ‘contemplate’ a proposal. Those are the same ones who ran the show over the last few years and nothing happened, primarily because it was easier to say ‘The schools are their own entity, and the city government shouldn’t be involved because it’s beyond it’s our scope of duty.’

    I’ll go out on a limb. I think everyone in Alameda has ownership of the schools whether they own property or not. And it’s time that the load, and thus the benefit received by all, for supporting the schools for our kids, involves everybody.

    There is one thing most (note I say most) every resident has in common in this town. It’s an electric bill. And we own our electric company. While I’ve only been here since 1973, it seems to me a long time ago we may have had an assessment on that bill for some city need. Everybody paid. I may be wrong. And I’m sure there are tons of rules. But since our little utility board dismissed this suggestion a while back, it’s time for the citizens to demand the city council (yep, the council) get involved in researching and finding ways out of the typical box we have put owners into regarding parcel taxes.

    This is a time for our city to shine, chuck the state’s creation of our problems, and find some work-around solutions. Combine this attitude with the longer term necessary lawsuit, we just might come out of this mess more solid, more unified as a community, more effective for our students, and with a sense of pride that was once part of Alameda schools. It’s time to stop accepting bureaucratic ‘no’s’. Demand more.

    Michelle you rock, too.

    Amen and amen.

  • Kristen says:

    Great article, Michelle.
    I found Marilyn’s comment very interesting. I’m a renter and I would support paying an assessment on my electrical bill to benefit the schools. I’d love to know if this is possible!

    • Kristen,

      That’s a good question. As I understand it, the only avenue the school district has for collecting additional taxes is through a parcel tax. I know they’re pursuing a new one and that one of the school board members, Mike McMahon, has said he would favor a building-square-foot tax of 20 to 25 cents per square foot of building. The board is holding a meeting Thursday at Amelia Earhart Elementary to talk about parcel tax structures; they’re slated to review a proposed tax measure for the ballot on November 9 and vote on something November 23.

  • Jen Laird says:


    This is such a thorough and important article. Thank you for what must have a lot of work to research and produce it. I don’t know much about the journalism world. Is there a possibility it will be picked up by the Alameda Journal or Sun so that community members who don’t get their news online can see it?

  • John says:

    While it is clear that Alameda students are being short-changed in comparison to surrounding districts, I have wondered about the comparison between the amount of tax (property and income) collected from Alameda taxpayers and surrounding districts. Alameda isn’t exactly an inexpensive place to live, so I would guess that despite being on the bottom in terms of funds recieved for our schools, that we are probably contributing more in taxes on a per capita basis than some of our better funded surrounding districts.

  • Mark Irons says:

    John, That’s interesting question. Would you draw a conclusion based on the answer, or do you have an angle in posing the question? One thing is for sure, all the homes held by land lords and long time residents for a number of years have enjoyed the advantages of prop 13, which over time reduces the taxes coming out of Alameda. Areas of rapid turnover and appreciation are likely paying a lot more.

  • Publius says:

    Local revenue is only a fraction of school funding, the largest portion is by far BRL that comes from the state. The largest share of the state’s revenue is income taxes. If you are lookinf for a per capita contribution number, income is a greater determinant than property values/taxes.

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