Almost 25% of California School Districts to Experience Property Tax Hikes
Commentary
Another unexpected factor is the rise in expenses related to local school district bonds, which will further inflate housing costs.
A report from the Coalition for Fair Employment in Construction revealed that, during the November 2024 election, California voters approved an astonishing 208 school district bond measures. Additionally, 28 bond measures were endorsed during the previous year’s March primary. Altogether, voters in 218 school districts have agreed to incur over $49 billion in new debt, translating to approximately $100 billion in new taxes when accounting for interest costs.
California school districts typically expend nearly all of their revenues on rising teacher salaries, failing to allocate funds for necessary capital upgrades to aging facilities or the construction of new structures. Alarmingly, they invest only about three percent of their annual budgets into maintaining existing buildings. Instead, these districts frequently appeal to voters for bond measures, asserting the dire state of their schools—a claim that voters nearly always accept.
It is property owners within the district who are responsible for paying off the bonds, rather than the school districts themselves. Principal and interest repayments are determined based on real estate assessed values set by California’s County Assessors.
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How can a young couple afford to purchase a home in California? It would be tragic if rising school bond taxes hindered their ability to cover groceries, California’s steep energy expenses, and the needs of a growing family.
Eric Christen, the executive director of the Coalition for Fair Employment in Construction, notes a slight silver lining as voters rejected 75 similar ballot measures in the prior year.
Why should stakeholders in the construction sector care about school bond measures? Because the implications are troubling: Teachers’ unions have significant influence over school districts, and union leaders tend to support their fellow union associates.
When unions control school districts, they promote what are known as Project Labor Agreements (PLAs), which mandate that districts engage only union-affiliated firms for any new developments funded through bonds. This results in a situation where most capable builders are non-union, and the remaining union firms can charge premiums—sometimes up to 30% more than their non-union counterparts.
This leads to a scenario where residents might only see $83.3 million worth of improvements from a $100 million bond measure due to the elevated costs of union contractors.
Furthermore, the initial $100 million bond will impose an equivalent $100 million in interest payments on property owners. Thus, taxpayers within this hypothetical district could face $200 million in total additional charges spread over the next 25 years.
If the teachers’ unions had permitted the district to save funds over 25 years while accruing interest, residents could have saved close to $120 million!
Why do voters allow themselves to be misled? Remarkably, around one in four California school districts have managed to pass these costly bond measures.
A crucial factor lies in the support for lowering the threshold for school bonds, made possible by Proposition 39 on the November 2000 ballot. This change allowed school bonds to be approved with just 55 percent plus one vote, rather than the two-thirds majority required for usual tax hikes.
While it’s commendable to support one’s school district, rescuing a mismanaged government entity merely enables chronic fiscal mismanagement.
Homeowners should examine their tax bills carefully during their next installment payment. They will likely find several school district bond payments in addition to the minimum 1 percent tax on their home’s assessed value. This scenario will persist annually—year after year—for at least 25 years.
Do not rely on school board officials to prioritize your interests. With careful budgeting, you should also vote with consideration.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.
