Dec 13 2012
New Uniform Tax Structure of $2,406 Per Parcel Would Begin July 2013-
At its December 11 Special Meeting, the Board of Education voted unanimously to replace the District’s current tiered parcel tax with a flat uniform tax proposal for all Piedmont parcels. If approved by a two-thirds majority of Piedmont voters in March 2013, a tax of $2,406 will be levied annually on all parcels, regardless of size or use, beginning July 1, 2013. This includes undeveloped parcels, parcels with multiple units, and commercial properties. The term of the new tax will be for 8 years, beginning in July 2013, with a potential 2% inflation increase by the School Board permitted each year. The final year of the existing Measure B tiered tax would be rescinded. The term of the tax is to be eight (8) years with the expiration date of June 30, 2021.
Mark Williams of Fagen Friedman & Fulfrost LLP, legal counsel to the Piedmont Unified School District (PUSD), explained that both the existing Measure B tax and the proposed measure should be brought into compliance with a recent court decision impacting the Alameda Unified School District. The court ruled that school parcel taxes must be levied equally on all parcels. Taxing on the basis of tiers or “per square foot” of lot or structure would not comply with the court decision.
To generate Piedmont school parcel tax revenue of $9.5 million, the District proposed a flat rate of $2,406 per parcel for 2013-14. This flat amount incorporates a 5% increase over current 2012-13 revenues. The proposed measure will permit up to 2% annual increases each year thereafter by the School Board without further approval by voters.
Upon voter approval in the March election, the new parcel tax will increase $318 for smaller parcels, while decreasing up to $1,141 on the largest parcels and $2,899 on commercial parcels. Board members noted their displeasure with making the decision to make the tax a flat rate for all sizes and uses of lots, establishing a “regressive tax,” but felt they had to comply with the court decision to avoid jeopardizing school revenue.
The appellate court decision upheld a senior exemption, following a lengthy examination of legislative history and intent which noted “the rationale for allowing that [senior] exemption is that senior citizens receive less direct benefit from schools than other citizens.” However, the Piedmont Board did not pursue a PUSD senior exemption, asserting that most seniors already receive a significant tax break from Prop. 13. Additionally, the Board emphasized District revenue needs and were reluctant to transfer tax burdens from some households to other households. While a total senior exemption is legal, the PUSD counsel Mark Williams considered a partial or optional senior exemption riskier in terms of legal compliance.
Rather than delaying the vote on the tax measure until June, staff advised bringing District parcel taxation into compliance immediately, as of July 2013, by proceeding with a March ballot measure, as budget decisions must be made in the near future.
Board members received numerous emails in support of the flat tax and only a few opposed. They noted that if there are changes in financial circumstances or laws, the Board can reduce the level of the tax or place a new tax measure before voters.
Click here for more details on the tax in the Piedmont Patch. Current school parcel tax rates can be found in this article.
Campaign efforts have begun on the passage of the March 5, 2013 school parcel tax measure.