I went out and did a bunch of reading tonight on Basic Aid, and the changes that went into place with LCFF in 2013-14. Pretty interesting stuff.
Here's an explanation of why Basic Aid and how LCFF changes that (for the districts that are receiving greater than their allocation through property taxes, very little changes, since they were already so far over - 40% of CA's basic aid districts are in the Bay Area, and many of those districts also level additional parcel taxes in addition to normal property taxes to fund education.)
In 1978, apparently prop 13 determined 1% property tax across the state, and capped increases of assessed value at 2% per year. This caused property tax revenue to fall by 57%. Senate Bill 154 (Chapter 292, Statutes of 1978) created a one-year solution that was followed by Assembly Bill 8 (Chapter 282, Statutes of 1979). Essentially, AB 8 froze the proportions of property tax allocations among local governments to their pre–Proposition 13 levels. The proportion of countywide property taxes a local government received prior to Proposition 13 would be maintained, with local governments receiving the same proportion of the taxes generated by the new 1 percent tax rate. In 2010– 11, the property tax contributed nearly $50 billion statewide to local governments, with school districts and community colleges receiving 54 percent of all property taxes (California Board of Equalization, 2012)
Lots of interesting tidbits:
A substantial difference existed across counties, however, in the distribution of the average 54 percent allocation of property tax revenues to school districts. And such differences still exist. For example, in Alpine County, 26 percent of property taxes go to education and 62 percent to county government. In Santa Clara County, 62 percent of property taxes are allocated to education, 15 percent to the county government, and 9 percent to city governments.
This article also details the process - there isn't a choice, it just depends on the budget and if property taxes are above the revenue limit per pupil. Wealthier districts received 400-500 percent of the state funding in property taxes. LCFF applies correction factors for special needs students and ADA and gives the state other knobs to twist to encourage sub 24 students per class in elementary schools, etc.
Santa Clara County has a few interesting notes about Basic Aid:
BASIC AID RELATED ISSSUES
Ok, so here we have the root of Los Gatos's problem in specific:
(the enrollment growth issue is real is what this is saying.) But spending is over $9000 per pupil. the State average revenue limit is ~$8500. But, land and salaries alone are much more expensive in Los Gatos than the rest of the state.
California, is at 47/50 in spending per pupil. That just seems... silly. Palo Alto manages to spend $14700... which certainly sounds like a lot based on Los Gatos' situation, but holy crap, that's well below the $20000 - $30000 that top performing districts around the country spend on their students.
The worst part about this whole mess is that if enrollment goes up, Basic Aid (and LCFF) don't provide for an increase, until you count that student against the basic aid limits, which, especially in Los Gatos, which is growing rapidly, is not getting them more funding. The problem is obvious - once you are out of Basic Aid, you need to increase property tax revenue, which encourages, in times of real estate price growth, more turnover, but more turnover means more kids in school, so now you need more money again.
Interestingly enough, Cupertino is NOT a basic aid district. I was surprised at this, but the number of students per school, and area of contributing properties for tax purposes per school is low enough to where Cupertino still gets money from the state.
Silicon Valley Dad, who loves cars, cooking, clothes and cameras