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December 2, 2009 > Joint parcel tax with Milpitas Unified School District considered

Joint parcel tax with Milpitas Unified School District considered

By Simon Wong

Vice-Mayor Pete McHugh initiated a discussion on November 17, arising from the November meeting between the city and school district, about a possible joint parcel tax between the City of Milpitas and the Milpitas Unified School District (MUSD), to raise funds for Parks & Recreation programs that benefit both entities.

Complications and confusion could easily arise because the agencies have separate and distinct boundaries; there might be a need for separate ballot measures to achieve their common goal.

City Attorney Mike Ogaz advised on the feasibility of the proposal and provided clarification.

"We reviewed the law in this area. There is no legal prohibition to such a joint parcel tax. However, there are boundary issues. MUSD's boundary extends eastward beyond the city limits and part of the East Side Union High School District lies within the city's boundary. The city and MUSD don't have a common boundary so we couldn't see how an election could occur unless we have separate measures before the voters," explained Ogaz.

"We discussed the matter with the Registrar of Voters to see if this has been done before. In their experience, they didn't know of any joint city-school district proposal for a parcel tax. We considered the idea of forming a special district, which would be a significant undertaking, to create mutual boundaries that could go before a certain set of voters," he added.

Creation of a special district would involve Santa Clara LAFCo (Local Agency Formation Commission). LAFCo is a regulatory agency with quasi-legislative authority. While having county-wide jurisdiction, LAFCO is independent of county government and provides assistance to local agencies in overseeing jurisdictional boundary changes. Annexation is the most familiar scenario.

The school district wishes to act in January 2010 and place a measure on either the June 2010 or November 2010 ballot. There is inadequate time to organize a special district through LAFCo.

Councilwoman Debbie Giordano reminded everyone of a 2008 survey in which only 50 percent of those polled favored the idea of a parks and recreation-related ballot measure. A two-thirds, or greater, vote is required to pass. A recent survey by MUSD found some approval for a $110 parcel tax but more support would be needed for such a measure to pass in an election.

"Given these two elements and the state of the economy, I think we may be a bit premature. Talking with the community, I don't think we're in the right place at the right time for this. I think a joint measure would hurt the school district if it were to fail. I'm not in favor of such a venture at this time," stated Giordano.

Councilmembers Armando Gomez and Althea Polanski and Vice-Mayor Pete McHugh concurred they would support MUSD, should it decide to place its own parcel tax measure on the ballot, and a joint measure would be inappropriate at this time.

Parcel taxes are the only authorized method available to school districts to raise additional public funds for operating expenses, as per Proposition 13 which was enacted in 1978 and radically reduced property tax revenues and changed the way in which school districts are funded.

The City's Parks Master Plan contains several financing options including a bond measure which could afford the opportunity for the city and MUSD to work together on joint use facilities.

"A bond measure has some advantages. Beside a 50 percent threshold, more revenue is generated, thus, enabling more improvements. A parcel tax of, say, $30 will create less revenue and would be inadequate to complete the Parks Master Plan. Now is the wrong time but perhaps a bond measure, in the future, that would improve both the city's and school district's properties is the answer," concluded Mayor Bob Livengood.

Council voted unanimously that no further action on its part would be appropriate.

For more information, visit (City of Milpitas), (Milpitas Unified School District) and (Santa Clara LAFCo).

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