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."