This will be short note, I’m afraid. I’m up to my eyeballs in writing projects, so I have to make this quick. The Albany Unified School District (AUSD) has put a parcel tax on the March 2020 ballot as Measure B. After having given it some thought, and after doing some background research, I’ve decided to vote against Measure B. Here’s why:
Measure B replaces the existing Measure LL which will sunset (terminate) in July of 2021. If Measure B simply asked to continue at the same inflation-adjusted level as Measure LL, I would have no trouble endorsing it. However, according my current property tax bill, we now pay $318 annually for Measure LL, while Measure B will start at $448 annually, and increase of 41 percent.
If Measure B guaranteed that the new money would be held in a restricted fund to deal with pension costs, I would vote yes. But it doesn’t. There needs to be some justification for an increase of this amount, and I’m not seeing it. For comparison, note that in the 2018 elections, the City of Albany asked to voters to extend our half-percent sales tax (Measure L) and our parks and open space funding (Measure M), but at the existing rates.
I’ll be the first to admit that when I was on the school board from 2002-06 we used the same sort of heart-warming photos of cute Albany kids in our campaign literature. But times have changed. Local governments are facing a serious pension-funding crisis, one that will play for a decade or longer (here and here and here). AUSD’s literature would be more honest if it featured age 60+ folks like me holding up signs that say “SAVE OUR PENSION SYSTEM.”
In Albany we have some folk wisdom that needs a critical second look. Do we have great public schools? Depends on your benchmarks. Compared to our surrounding schools districts–Berkeley and West Contra Costa, we do have high-performing schools. But compared to schools nationally, Albany schools are solid mid-pack peformers, as this interesting graphic from the NY Times shows. Albany is sometimes compared to another small local city, Piedmont. Oddly enough, the wealthy Piedmont school district tends to underperform when measured against its peers.
And are Albany teachers underpaid? Again, it depends on the comparison. The Albany teacher’s step-and-column table is here. Similar pay schedules for nearby districts are here for Berkeley (scroll down to Appendix 12), Piedmont and West Contra Costa schools. The steps (rows) indicate years of service, while the columns indicate the amount of education.
Albany teachers are paid at least as well as teachers in nearby districts. However, compared to other public organizations, Albany teachers are paid fairly well. For example, I retired as a UC Berkeley science writer and editor after 20 years of working at UC. My pay was roughly the same as a Column 3 Albany teacher with 14 years of experience.
For more comparisons, the City of Albany’s salary schedule is here. The Sacramento Bee maintains a database of public sector employee compensation (here) but it is annoying to use. This database is easier to use, and it is looks accurate (including for my data), but it is put together by a conservative political organization in Nevada.
There are a few caveats that I should mention. First, as a UC employee, I continued to pay into the social security system, so when I retired, I got my UC pension and I am eligible for social security benefits. There is an employer match in social security, so my pay + benefits are higher because of that. When a teacher joins the STRS pension system, they stop paying into the Social Security system. This creates some unusual incentives.
For teachers who enrolled in STRS in 2012 or earlier, their pension payment is based on their highest one year of pay. This leads to the what called spiking, or pay scales with a big bump in the final year. Albany’s step-and-column is a good example. After remaining relatively flat for several years, in the final year, the annual pay jumps by almost $5,000. For teachers hired after 2012, the pension benefit is based on the highest three years of salary, which is the typical practice for public sector organizations like UC and city governments.
More generally, the STRS pension system creates incentives for a steep system of steps, meaning starting teachers get paid less, while senior teachers get paid more. If teachers also paid into the social security system and got full benefits from both (as I do), the incentives for spiking and steeper steps would be reduced. This would benefit starting teachers, who get paid considerably less than senior teachers.
Now, a note on our property tax bills. I just crunched the numbers for 2019-20 (we paid the 1st installment already, and have the 2nd installment due in April). On the left hand side of our bill, the ad valorum portion, the county gets one percent of our assessed value (less the $7,000 homeowner exemption). For me that’s 56.31 percent of my total tax bill. The county gets a bit of parcel tax revenue, but it’s pretty small. From both ad valorum and parcel taxes, the school district gets 20.98 percent of my property taxes. That amount would rise to 22.17 percent if Measure B passes. The city gets 16.56 percent.
Finally, it’s is important to note that California school districts get significant funding from the state in the form of average daily attendance (ADA) money. For AUSD, that amounts to a little more than $9,000 annually per student. If AUSD is turning to Albany residents for extra funding at the top of the business cycle when state budget has a healthy surplus, what is going to happen when the next recession inevitably occurs as our public pension obligations are increasing?
When I was on the school board, the district was run Dr. William Wong, whose management goals were shaped by running poor rural school districts in Southern California. Wong ran a tight ship financially. From my conversations with various Bay Area educators, AUSD since then has developed a reputation for (how to put this politely) getting looser with its financial management. But then if you have a group of sort-hearted, naïve citizens willing to bail you out with parcel taxes, why bother to run a tight ship?
If Albany residents are going to be the funders of last resort for our local government agencies, we need to start thinking seriously about how we will address our long-term funding needs. I don’t think Measure B does that. Albany residents will have plenty of opportunities to tax themselves in the coming decade. For now we might want to hold off.