By Helen Marsh
The economics of living in the Sonoma Valley are changing. Families that have been here for generations are closing or selling businesses and properties that have long been stalwarts of the local economy. Think the Lynch Family’s Index-Tribune, Benziger Winery, the Mulases, and many others. In the 1970s through the 1990s, Sonoma was an attractive location for “newcomers” looking for a small community where families could thrive.
Many current residents are now dismayed by the reality that the next generations can no longer afford to raise their families here. Housing prices have skyrocketed to the point that homes are out of reach for all but the wealthiest families. Houses are increasingly being purchased as second homes. Investors are focused on modest apartment complexes where rents exceed thousands of dollars a month. With each upward spiral in real estate prices, property taxes also increase.
What does this have to do with the current budget crisis that the Sonoma Valley Unified School District leadership claims that the District is facing? SVUSD enrollment has been dropping for a number of years, in part because families are priced out of the housing market. Board members have stated publicly that if the Board does not close an elementary school this year, the state will do it for them.
Declining enrollment gets at least some of the blame, according to District leadership. In fact, the community has been told for decades that declining enrollment means less money for our schools. Certainly, at one time that was the case. But is it still true?
Back in the day, most school districts in California received state funding based on Average Daily Attendance, or ADA. Under that scheme, it was attendance that dictated the amounts that SVUSD received from the state. But even “back in the day,” there were wealthy California school districts identified as “basic aid,” and those districts received most of their funding from local property taxes, and not from the state.
Due in part to equity considerations, California, in 2014, attempted to address the disparity between wealthy and less wealthy districts. ADA, or revenue limit districts, were renamed as Local Control Funding Formula districts (LCFF), but the wealthier districts continued to be referred to as Basic Aid (or “community funded.)”
It works like this. The legislature allocates an amount roughly determined by attendance and ensures that all districts have a minimum amount of funding. If this formula results in a need for $50 million, the state first determines the district’s share of local property taxes. If that amount is $20 million, then the state fills the district coffers by $30 million to meet the $50 million minimum.
On the other hand, if that same district generates $90 million in school related property taxes, it receives no additional general state aid. But it gets to keep all the $40 million in property taxes, achieving funding far above the level that the state sets for LCFF districts.
The typical scenario in Basic Aid districts involves declining enrollment while property tax revenues stay level or increase. As enrollment falls, Basic Aid districts have more money to spend on fewer students. In other words, for Basic Aid districts, declining enrollment results in increasing amounts available on a per pupil basis. The notable examples of these extremely wealthy districts are in the South Bay, where the tech boom has created communities of mostly high socio-economic families.
According to the October report “Excess Revenue, Unequal Opportunity – Revisiting Basic Aid in the LCFF Era,” excess local revenue in basic aid districts has risen forty-one percent (seventeen percent when adjusted for inflation) over five years — outpacing the growth in funding for LCFF districts.
While the effect is the greatest in the wealthiest communities in the state, the same trend is underway in the rural North Bay. In Sonoma County, roughly half of the districts are Basic Aid. We need look no further than Kenwood, with 125 students in a single TK-6 school. Local revenues are approximately $3.66 million, or roughly $29,000 per student.
How is the money spent? Kenwood offers class sizes of less than twenty, with a teacher and an aide in every classroom. Teachers’ salaries range from $66,000 to $132,000.
Sonoma Valley Unified School District has been a Basic Aid district since September 2017. To be sure, SVUSD is not as wealthy as Kenwood. The budget of $69 million provides for the education of 3,000 students in TK-12 schools, or approximately $23,000 per student. The salary schedule for SVUSD teachers ranges from $62,000 to $110,000.
SVUSD competes most directly with similar sized or larger districts. In recent years, several SVUSD employees were hired away by Novato Unified, in Marin, receiving immediate salary increases of tens of thousands of dollars. Similarly, several SVUSD employees took positions in Napa County, where all but one district is Basic Aid.
One might wonder, then, why SVUSD leadership is not more confident about the future, and less concerned about the financial impact of declining enrollment. Instead, declining enrollment is presented as a financial challenge that justifies closing two schools in two years. While declining enrollment eventually means a need for fewer schools, it is a process driven by economic benefit not economic hardship. The question we should be debating is how best to spend the money? Improving the salary schedule to compete with other Basic Aid districts? Focus on the arts and other core programs that are so important in our community?
Why is this misconception so widespread in Sonoma? In part, there is a lack of effort to provide accurate information to the community. In part, board turnover may have resulted in a lack of understanding of the problem by some newer board members. In part, the change in the structure of board meetings makes it nearly impossible for community members to ask questions (and receive answers) at those meetings. All of these contribute to the spread of misinformation about school funding.
Helen Marsh is a Sonoma attorney who was a SVUSD board member from 2004-2014. She currently focuses her legal practice on employment, business and special education.
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