Nearly One-Quarter of California’s School Districts Will See Property Tax Increases

Displaced students from Marquez Elementary School, destroyed in the Pacific Palisades fire, arrive at Nora Sterry Elementary School to resume class in Los Angeles on January 15, 2025. Chris Delmas/AFP via Getty Images

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With the loss of so many homes in the Los Angeles area, there will be a huge demand for replacement housing, which is anticipated to drive up the cost of homes and rentals. The losses were caused by wildfires, so the cost of homeowners insurance is also predicted to increase, impacting everyone in California.

There is one more surprise: The cost of local school district bonds will make housing even more expensive.

According to the Coalition for Fair Employment in Construction, in the November 2024 election, Californians approved a remarkable 208 school district bond measures. In last year’s March primary election, 28 bond measures were also approved. Combined, the voters in 218 school districts agreed to take on more than $49 billion in new debt, or some $100 billion in new taxes thanks to the related interest costs.

Annually spending nearly every dime of revenue for the costs of rising teacher pay, California school districts refuse to set aside funds for future capital remodeling improvements for worn out existing buildings and additional needed facilities. And they are derelict in not budgeting proper levels for ongoing maintenance, spending only three percent of their annual budget on maintaining existing structures and buildings. Instead, they regularly ask voters to support bond measures, claiming their schools are in poor shape. Sadly, voters almost always buy it.

Bonds are paid not by school districts, but by the property owners within their boundaries. The principal and interest payments are allocated based on real estate assessed values calculated by California’s County Assessors.

Since newer owners will have higher assessed values (based on their recent purchase prices), they will be paying more than their long-term neighbors.

How is a young couple able to afford the purchase of a home in California? And how tragic would it be if the additional school bond taxes undermined their ability to pay for groceries, California’s high energy costs, and a growing family?

Eric Christen, executive director of the Coalition for Fair Employment in Construction, sees a silver lining in the fact that voters killed 75 similar ballot measures last year.

Why should someone associated with the construction industry be focused on school bond measures? Because it gets worse: Teachers’ unions run school districts—and union leaders love other union leaders.

When unions run school districts, they assist their brothers in the private sector with what are called Project Labor Agreements. These PLAs require that school districts hire only union-run companies to build new improvements with the borrowed funds. But the vast majority of quality builders are non-union, and the few remaining union companies can charge a premium—up to 30 percent higher than non-union construction firms.

That means that instead of receiving, say $100 million in new construction from a voter-approved bond measure, the residents will only receive $83.3 million of real product, at best.

And the $100 million bond will cost property owners another $100 million in interest costs. So, $200 million in additional charges for the next 25 years will be spread across the property tax bills of every parcel in this hypothetical district.

Had the teachers’ unions allowed the district to set funding aside for 25 years, earning interest, then it would have saved residents nearly $120 million!

Why do voters let themselves be duped? And why did nearly one in four California school districts have these expensive successful bond measures?

First, voters supported a lower threshold for school bonds to pass. This was done with Proposition 39 on the November 2000 ballot. Instead of taking a two-thirds vote, as with normal tax increases, school bonds require only 55 percent plus one vote to be approved.

It gets worse: The teacher unions behind these bond campaigns encourage the district officials they helped elect to hire political consultants. Those consultants run expensive surveys designed to determine how much debt can be issued based on the responses received. It’s a clever and effective method to actually push voters to support a bond hike. This cute technique circumvents state law and gets a bond measure passed but does not necessarily provide nearly close to the funds that are really needed for appropriate renovation of intentionally neglected buildings.

Many commercial renters will see their overall rental costs rise as landlords pass along the cost in the form of higher rents. Just look up the term triple-net lease. Likewise, residential rental property owners will also pass along the increase in property taxes to their tenants. And in the greater Los Angeles area, this is certain to occur due to the recent wildfires.

It’s admirable to feel charitably toward one’s school district. But bailing out a dysfunctional government agency turns voters into “enablers,” allowing continual poor fiscal management.

If you own your own home, be sure to read the small print on your tax bill when you make your next installment payment. You’ll see one or more school district bond payments included, in addition to your 1 percent minimum tax payment on the assessed value of your home. And it will reappear on your annual bill—year after year for at least a quarter century.

Don’t count on your school board officials to look out for your interests. If you budget carefully, you should also vote carefully.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.