© 2011 Dannis Woliver Kelley This training is provided for educational, compliance and loss-prevention purposes only and, absent the express, prior agreement of DWK, does not create or establish an attorney-client relationship. The training is not itself intended to convey or constitute legal advice for particular issues or circumstances. Contact a DWK attorney for answers to specific questions. Countdown to a 2012 Parcel Tax CSBA 2011 Annual Education Conference and Trade Show December 2, 2011, San Diego, CA SAMUEL R. SANTANA

© 2011 Dannis Woliver Kelley 2 QUALIFIED SPECIAL TAXES ─ Parcel Taxes provide one way to provide secure, enhanced funding for “soft” costs, including for teacher salaries, books, materials and supplies, computers and other equipment, and for vulnerable art, music and sports programs.

© 2011 Dannis Woliver Kelley 3 What is a Parcel Tax? “Parcel Tax” is the common term for a school district “qualified special tax”. Cities, counties and other districts can also adopt special taxes. Special taxes are permitted by the Constitution, and require approval at an election by at least 2/3 of those voting on the measure.

© 2011 Dannis Woliver Kelley 4 What can Parcel Taxes be used for? Virtually anything. The law does not specifically limit how Parcel Tax proceeds may be spent, but the school board can impose any limits it wants to in the ballot measure. Ballot measures typically focus on “programs,” but if the measure is worded appropriately, the funds can be spent on teacher salaries, materials, equipment, and so on.

© 2011 Dannis Woliver Kelley 5 When can we conduct an election to approve a Parcel Tax for the District? June 5, 2012 (Filing date: March 9, 2012) or November 6, 2012 (Filing date: August 10, 2012). In general, school district elections can only be conducted on an “established election date”.

© 2011 Dannis Woliver Kelley 6 How long does it take to call an election? At least 90 days, for the entire legal process. However more time should be allowed for proper planning, surveying, if desired, and to allow concerned citizens to organize into an effective campaign committee. An election held in November 2012 would have to be called no later than August 8, Sample Parcel Tax Election timetables for 2012 can be created for your district.

© 2011 Dannis Woliver Kelley 7 What is the legal rate of tax? Are there alternative ways of specifying the rate? There is no maximum rate of tax. Parcel Taxes are typically levied as a flat rate per parcel. Some districts levy a rate at a fixed amount per square foot of taxable land, and many include an annual inflation adjustment. The tax must be uniform as applied to all real property or to all taxpayers. The tax cannot be related to a taxpayer’s use of the schools. And the tax rate cannot be expressed in terms of the value of the property (an “ad valorem tax”).

© 2011 Dannis Woliver Kelley 8 Who must pay the tax? Can certain properties or certain taxpayers be included or exempted? All real property or all taxpayers must be taxed. There are two exceptions in the law, for senior citizens (taxpayers aged 65 or older) or for Supplemental Security Income recipients. Exemptions or reduced rates granted to any other group of taxpayers or any classification of property may violate the law’s uniformity requirement. Some school districts adopt administrative procedures to grant special relief in cases where the tax is deemed unfair. But even these exceptions are not clearly permitted by statute. In addition, unlike for certain school bonds, there is no authority to create special zones within the school district to exempt specific geographical areas, neighborhoods or developments.

© 2011 Dannis Woliver Kelley 9 How often must our Parcel Tax be renewed? There is no maximum term. Traditionally, school district Parcel Taxes were approved for four years. However, there is no limit in the law, and taxes lasting 5, 7, or more years are increasingly common. The longer the term, the more inflation can be expected to erode the spending value of the tax over time, leading many districts to include an inflation escalator in the tax formula.

© 2011 Dannis Woliver Kelley 10 Samuel R. Santana/ We have assisted a number of our clients with Parcel Tax matters. For a customized calendar for your district or other assistance with Parcel Taxes and bond measures, please contact Sam Santana at (562)