Veto may await California bill that would ease passage of parcel taxes.

LOS ANGELES -- Budget-strained California school districts will find some relief if Gov. Pete Wilson signs a bill that would allow the passage of parcel taxes with a simple-majority vote by local residents.

But parties on both sides of the debate expect the governor to veto the legislation this year, although proponents said they addressed Wilson's concerns in this version of the bill. Wilson has until Sept. 30 to veto the measure.

This is the third time state Sen. Gary Hart, D-Santa Barbara, has proposed the idea of using parcel taxes to pay for schools. Twice, the governor has vetoed the proposal.

"If it was going to be signed, it would have been signed last year," said one supporter of the measure, who asked not to be named. "Now it's so political with the election year."

What has tipped the scales against the parcel tax proposal is a recent state court decision in San Francisco that invalidated a tax imposed by an educational financing authority.

Antitax groups further contend that school districts are special districts, and they are thus required to muster a two-thirds vote to pass tax measures. In fact, this was one of the key explanations that Wilson offered in his veto message of Senate Bill 1, last year's version of the proposed parcel tax.

Senate Bill 1261, the latest version, would allow school districts to impose qualified general taxes, such as a parcel tax, that require only a 50% voter approval. Since the revenue raised by the tax would be deposited into the school system's general fund, schools can levy general taxes, said Laura Walker, a senior legislative advocate for the California School Boards Association, which sponsored the bill.

Qualified general taxes are flat taxes paid equally by all of the taxpayers in a district, and the revenues are used for the general purposes of a school district or a community college. The parcel tax proposed by SB 1261 would not be used for school facilities construction.

The bill would also permit majority-vote parcel tax measures to appear on local ballots if 5% of the district's voters sign an initiative. Revenue raised from the tax would be in addition to the funding that districts already receive.

What sets this year's measure apart from its predecessors are two restrictions that were not contained in earlier versions of Hart's plan, said William Whiteneck, chief consultant for the Senate Education Committee. First, the duration of the parcel tax would be limited to four years, When voters would have to reapprove the levy.

Second, each school district would have to set its revenue expectations from the tax at 10% of the statewide average base revenue for each type of school district. Community colleges would not be able to exceed 10% of their annual apportionment. The average base revenue figures come from the state's education department, which calculates them annually for each of the different types of school districts in California. This year, the average revenue for high school districts is $3,800; for elementary districts, average revenue is $3,200; for unified school districts, it is set at $3,400.

Using Los Angeles Unified School District as an example, school administrators would multiply $340 -- 10% of the $3,400 average revenue figured for unified school districts -- by the 792,239 students in the system. The total of $269,361,260 is the amount that Los Angeles Unified School District could collect in parcel taxes.

In a behemoth of a school district like Los Angeles Unified, where wealth is unevenly distributed, parcel taxes can seem Unfair to residents in the poorest parts of the city.

"We recognize disparities within some districts, but with the language in this bill, you could determine a parcel tax based on the square footage of property that someone owns," said Whiteneck: People who own less property would pay a smaller parcel tax, he said.

Still, the fate of Hart's bill might already be sealed as a result of an Appellate Court decision earlier this year in the so-called Hoogasian Flower case. The Appeals Court agreed with a 1993 Superior Court decision striking down a local one-quarter cent transaction and use tax that received majority approval in the city and county of San Francisco.

"The court invalidated the tax on the grounds that it constituted a special tax requiring two-thirds voter approval," says a Senate analysis of SB 1261. The outcome of Hoogasian Flower is deeply rooted in an even weightier court case, Rider v. County of San Diego. The California Supreme Court ruled in 1991 that the San Diego County Regional Justice Financing Authority's transaction and use tax, voted in with majority approval, was unconstitutional.

The tax was found to be a special tax subject to a two-thirds approval from voters, according to the analysis.

Although these cases do address the question of voter requirements for special districts, Whiteneck said, Rider and Hoogasian are not specifically related to the parcel tax proposed by Hart. For example, SB 1261 would allow a school district to impose and distribute the tax revenue directly, not through a financing agency.

In addition, neither case resolves a basic question in the dispute over requiring a majority voter approval for local school funding efforts: whether school systems truly are special districts.

That question may find an answer in court if the governor signs the bill and the Howard Jarvis Taxpayers' Association sues as it has threatened to do, Whiteneck said.

"If it goes to court, we'll have an extremely easy victory," said Jonathan Coupal, director of legal affairs for the Jarvis group.

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