News

Los Altos home values soar, but school district budget is tight

Other school districts flourish while LASD can't afford to give teachers raises

The last decade marked a boom time for local schools and cities, with many benefiting from enviable property tax growth and economic prosperity.

But the big budget boost has been uneven among school districts serving Mountain View students, leading to a perplexing situation. The Los Altos School District -- a community where median home sale prices exceed $3 million -- finds itself strapped for cash, short on reserve funds and challenged to pay teachers higher salaries in the middle of a housing crisis.

The reasons for the budget woes are manifold, but the results are clear: Since 2015, the neighboring Mountain View Whisman School District has seen its annual revenues rise by 23 percent, from just under $62 million in the 2015-16 school year to $76 million today. The Los Altos School District (LASD), by comparison, remained flat over the same period, from $65.7 million to $66.6 million in total annual revenue.

The Mountain View-Los Altos High School District, though financed differently than elementary districts, also stands in stark contrast to Los Altos: Its annual budget has catapulted to $94 million, up nearly 35 percent from 2015.

A side-by-side comparison of school funding, presented at a recent budget study session, shows that LASD receives $14,535 in total revenue per student, with Mountain View Whisman close behind at $14,130. The delta between the two used to be much larger, and Mountain View Whisman could be nearing a landmark moment, overtaking Los Altos in per-pupil funding for the first time.

That translates into a rainy day fund that has dropped to just under 6 percent of the annual budget at a time when a recession is likely looming. The district would blow through the entirety of its reserve funds as soon as next year if it offered employees a cost-of-living raise.

Why Los Altos' school budget looks the way it does is complicated, said Assistant Superintendent Randy Kenyon. He sought to explain it to school board members during the March 11 meeting with graphs and data going back decades.

"Each district has a different story," Kenyon told the Voice after the meeting. "What I tried to do was share with the board the analysis to understand our story compared to other districts."

The trouble is, there's no easy answer, he said. School sizes, class sizes, salary schedules and special education costs -- pretty much all of the expenditures are in line with similar districts in Santa Clara and San Mateo counties.

The difficulties might instead lie on the revenue side. Data compiled by the district's Citizens' Advisory Committee for Finance (CACF) last year found that Los Altos School District's assessed property values sank below Mountain View Whisman's sometime over the last decade, and that Los Altos' anemic commercial property tax growth was the clear difference-maker.

It's no secret that Los Altos remains a residential powerhouse with extraordinarily high home values, but Mountain View Whisman's nonresidential assessed property values increased by more than $5 billion since 2008, providing a windfall for local schools. LASD saw a much more modest $800 million increase.

Joe Seither, a former member of the finance committee, urged residents not to play the blame game, saying that land use and zoning policies in Los Altos are a fact of life and don't lend themselves to major tech companies moving in. It's a trade-off, Seither said in an email, and residents may prefer the quaint low-density downtown over the construction taking place around the San Antonio shopping center.

The other factor suppressing tax money from flowing into district coffers is Proposition 13, which caps property tax growth. A district staff report found that the median sale price of a home in the district is $3.14 million, but the median assessed value is about $1.3 million. More than 1,200 of the district's single-family parcels are assessed at values less than $200,000.

The delta caused by Prop 13 means that the district only receives about $4.4 million in annual property tax revenue over the minimum amount guaranteed by the state, a small amount that seems to contradict the expensive real estate market the district encompasses, said Curtis Cole, a CACF member.

The school district has sought to supplement the property tax revenue through two parcel taxes for a combined $10.5 million in annual revenue, and receives a generous $3 million annual contribution from the Los Altos Education Foundation, but it still leaves the district in a tight spot.

"LASD is challenged to balance the pressure of increasing expenses, competing to recruit and retain staff while maintaining facilities on all its campuses, against an uncertain revenue source upon which the district has no control," Cole said.

For every seemingly obvious cause of the budget problems, there's usually a caveat or a school district that serves as a contradiction, Kenyon said. Hillsborough doesn't boast a thriving commercial sector yet its revenue per student is a staggering $19,400. Some may point to LASD's school sizes as inefficiently small, Kenyon said, but Palo Alto and Saratoga seem to do just fine with their small neighborhood campuses.

"That (theory) works for Cupertino," Kenyon told board members last month, referring to that district's large schools. "It certainly doesn't work for these other districts because they have equivalent or smaller schools than we do."

Another facet of the district's budget that can't be ignored is Bullis Charter School, which enrolls about 850 students who reside in the district. This requires the district to transfer $7 million out of its annual budget to Bullis, or about $8,000 per student. The sum is expected to increase to $9 million as the charter school expands its enrollment next year.

But the precise impact Bullis has on the district's bottom line is difficult to determine. Plenty of those charter school students would have attended a district-run school instead, where the district spends about $14,440 per student, according to the 2018-19 budget. But an unknown number of them might have gone to a private school instead, costing the district nothing, Kenyon said.

A majority of the district's money pays for teachers and staff, and the tight budget has typically led to modest pay raises -- between 2 and 3 percent -- that don't keep up with the rising cost of living in the Bay Area. The starting salary for a teacher this year is $57,000, which is less than half the median income in Santa Clara County. Mountain View Whisman, which used to offer nearly identical starting pay to Los Altos, has increased its lowest salary to $64,000.

Ricky Hu, president of the Los Altos Teachers Association, told the Voice that it's become increasingly difficult for teachers to afford to live in the area, and that he's observed small homes where he lives in Sunnyvale going for $1.7 million. Teachers, like many middle-income and blue-collar workers, are finding it harder to make ends meet in the area.

"Teachers are not asking to be millionaires, but they are asking to be able to afford a decent home," he said.

Consistent with past years and his predecessor, Hu said he has a strong working relationship with district administrators and doesn't see the consternation about budget problems as posturing for negotiations. There are larger forces at play, he said, and education funding simply can't keep up with the salaries paid by major tech companies in the region.

"I think personally teachers could stand to make more and deserve more for the work that they do," Hu said. "But I do think there are larger issues at play that make it challenging and, as much as we want to pay our teachers, we're never going to be able to compete with some of the salaries in this area."

Although it's built into the budget as an assumption, Hu said it's important to remember how much the community has rallied to support public education. Along with two parcel taxes totaling $10.5 million in annual revenue, parents donate millions more through the Los Altos Education Foundation (LAEF) and individual PTAs to support a range of programs and services that the district couldn't otherwise afford.

"I can't stress enough how much work they do for the school district and our ability to serve our students as best we can," Hu said.

While working on the LAEF board, Seither said he would emphasize that the grant money it received to help pay for teachers wasn't just a luxury in a well-heeled community, it was a strategy going back decades to support schools that would otherwise be starved for resources.

"I wanted to emphasize the message, 'This is just how we do things here,'" Seither said. "Because since 1982, donations have been necessary."

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Comments

188 people like this
Posted by hmm
a resident of Another Mountain View Neighborhood
on Apr 5, 2019 at 4:07 pm

Just think of all that money that the unions steal for all the staff, that would be more than enough for this district as well as other school districts.


5 people like this
Posted by @hmm
a resident of Another Mountain View Neighborhood
on Apr 5, 2019 at 4:18 pm

Can't help yourself, can you?

Ever thought that they may be more going on here other than the unions you so like to bash?

Or is your brain wired to put out nonsense 24/7?


4 people like this
Posted by Bored M
a resident of Cuesta Park
on Apr 5, 2019 at 4:49 pm

Kevin, nice piece... I don't say that often with the Voice.

Anyone know how donations fit into this? Los Altos raises in the range of 5x what MVWSD targets, if I am correctly reading those billboards in front of schools.


1 person likes this
Posted by Bored M
a resident of Cuesta Park
on Apr 5, 2019 at 6:02 pm

I should have been more articulate with my question. The $14,535 doesn't include the LAEF donations, correct? That would make it go up another $1k or so, right?


Posted by Name hidden
a resident of Old Mountain View

on Apr 5, 2019 at 8:00 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


322 people like this
Posted by Follow the Money
a resident of another community
on Apr 5, 2019 at 8:37 pm

Here’s where the money goes:
Web Link


10 people like this
Posted by Christopher Chiang
a resident of North Bayshore
on Apr 5, 2019 at 11:07 pm

Christopher Chiang is a registered user.

The article points out that both MVWSD and LASD's budgets are around $14,500+/per pupil.
The article leaves out that MVLA, the high school district's budget is $21,900+/per pupil: Web Link MVLA's starting salaries are $20k above starting salaries at MVWSD and LASD, and then to $40k gap for seasoned teachers, yet K-8 educators work just as hard, have the same expenses to live, are just as qualified, and serve the same families and students.

The only way to truly stabilize funding, pay teachers more, and most importantly, streamline support systems for students would be a K-12 unified school district combining Mountain View and Los Altos, similar to PAUSD.

Past grand jury report found that near $10 million would be saved in MV/Los Altos by unifying the districts: Web Link

District offices don't support it because it would mean some district administrators and board trustees would lose their positions, but voters should take the grand jury report as a serious proposition.


89 people like this
Posted by @follow the money
a resident of Another Mountain View Neighborhood
on Apr 6, 2019 at 7:32 am

Wow, looks like the school employees are making bank!!! And i thought i was doing good with my 80k tech job. I'm in the wrong job, are the schools hiring for a janitor position? any position? I want some of that bank roll. And they always strike for more money? And they are complaining about rent around here, that they need special house built just for them. OH MY.

Any other business would have been bankrupt by now.


1 person likes this
Posted by SRB
a resident of St. Francis Acres
on Apr 6, 2019 at 8:28 am

@Christopher Chiang

The districts' responses to the Grand Jury stated that the administrative savings from a merger would be dwarfed by extra costs of merging the salary schedules (elementary teachers would have to be moved to HS teachers schedules). Unless that has changed, a merger is a bad financial move.
The Grand Jury report also didn't look at impact on school revenue, given how complex school funding is (especially for basic aid districts), it's not clear that funding for a unified district would be the sum of the 3 districts revenue. I certainly wouldn't support a merger if it resulted in less overall funding for our kids.


3 people like this
Posted by Christopher Chiang
a resident of North Bayshore
on Apr 6, 2019 at 9:07 am

Christopher Chiang is a registered user.

@SRB. Raising the salaries of the K-8 teachers by reducing overlapping administration would be a very wonderful thing.
Children would benefit better retention of talented K-8 teachers. Logistically, a unified district here would have tiered salary schedules that would take years to sync, but Palo Alto pays elementary and high school teachers the same, worth MV and Los Altos exploring this same long term goal.


2 people like this
Posted by SRB
a resident of St. Francis Acres
on Apr 6, 2019 at 9:57 am

@Christopher Chiang

I'm not disputing the benefits but there are serious financial issues to consider:

Raising K-8 salaries to HS levels would cost twice the putative administration savings (see answers from school districts to Grand Jury repor
We don't know that the revenue for a Unified District will be the sum of the parts (as a former trustee, I'm sure you realize how complex school funding formulae are).
Merging the 3 districts will require a lot of accounting time and dollars to reconcile bond obligations, parcel taxes...


5 people like this
Posted by Factors
a resident of another community
on Apr 6, 2019 at 3:11 pm

The data is out on property tax collections for 2018-19. LASD's base increased 7.7% while MVWSD's only went up by 4.3%. So the trend isn't present for this current year.

A big factor in not having enough funds to give raises in LASD is having more teachers per student. LASD is at about 16.8 students per teacher this year, whereas MVWSD is closer to 20. So, the LASD teachers could have a 20% raise if their number was reduced to only have 1 teacher per 20 students. My understanding is that LASD historically had a ratio of about 1 teacher per 19 students and there is an intention to get back closer to this in the future, which will allow more teacher raises.

Another factor is that MVWSD has 34% low income students who need special help and are more expensive to educate. LASD has only 5% low income students. Both districts have a lot of local funding beyond property taxes, mainly parcel taxes and leasing out district owned land for rental income. MVWSD also gets more state aid than does LASD, around $930 per student versus $360 in the category once known as "basic aid".


Like this comment
Posted by ResidentSince1892
a resident of Old Mountain View
on Apr 7, 2019 at 11:00 am

ResidentSince1892 is a registered user.

@Follow the Money: now do the other nearby districts against which LASD competes for staff


4 people like this
Posted by Steven Nelson
a resident of Cuesta Park
on Apr 7, 2019 at 11:32 am

Steven Nelson is a registered user.

since 1892! wow, that is "OLD Mountain View"


Like this comment
Posted by Los Altos Resident
a resident of another community
on Apr 7, 2019 at 5:52 pm

@Follow the money - that list includes teachers, in fact most of the names are teachers’ names.


4 people like this
Posted by Politics
a resident of The Crossings
on Apr 9, 2019 at 10:13 am

Politics is a registered user.

LASD implies that the money they transfer to BCS (~$8,000 per student) is a loss. This is misleading. What's missing is the revenue LASD gains for the same BCS students (~$13,000 per student).

So LASD nets ~$5,000 per BCS student that they're no longer on the hook to educate or provide services for. It's unclear how they've reported this in their budget.

For the same reasons, BCS students who would have instead gone private are a gain for LASD, not zero as they stated.


Sorry, but further commenting on this topic has been closed.

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