Talk about money: Parcel tax isn’t much to pay

If your children attend Scotts Valley public schools, voting for the district’s parcel tax this June is an easy decision.
But what about homeowners who don’t have kids in public school? Will they get any benefit from paying $48 a year for three years to help a school district teach other people’s kids?
Based on my conversations with local realtors, the answer is yes.
First, in the interest of full disclosure: I have two kids attending district schools, so I’m biased.
So is Derek Timm, a local real estate broker and attorney, who has two children in the district and launched the nonprofit group Save Our Schools Scotts Valley (www.sossv.org). He said high test scores at schools equal high prices for homes in their districts.
Timm pointed to Los Gatos, where there are two school districts within the town limits. Part of the town is in the highly regarded Los Gatos-Saratoga School District, and part is in the less-highly regarded Campbell Union district. Timm provided records for the past 12 months of single-family home sales, showing that Los Gatos homes in the Los Gatos-Saratoga district sold for prices 35 percent higher on average than Los Gatos homes in the Campbell Union district.
Likewise, homes in Scotts Valley sell for a premium over homes in neighboring cities, because Scotts Valley schools’ test scores consistently rank in the top 10 percent in the state, Timm said. He added that 98 percent of the city’s high school students graduate and 97 percent go on to higher education.
But Scotts Valley Unified School District’s stellar record is in danger, Timm said. The state has cut the district’s budget by nearly $3 million annually, forcing it to shed more than 20 percent of its teachers, close libraries, and eliminate counselors and classroom aides. Parents and the community have responded by donating almost a million dollars a year over the past five years.
But the state is talking about cutting another $790,000 to $1 million from the district’s budget. Because of the way the state calculates how schools are funded, Scotts Valley already receives less money from the state than 97 percent of districts. If the planned cuts go through, district officials say it will run out of money by 2014.
If the district can’t balance its budget, it could be taken over by the state, leading to a steep decline in the quality of education, Timm said. The parcel tax would stave off that possibility.
As a realtor, Timm observed that in the past few years, property values throughout the state have dropped, but prices have dropped less in areas with good school districts.
“If you’re a couple whose kids are grown, maybe you want to downsize,” Timm said. “You don’t need three bedrooms anymore, but a young family does. When you put your house up for sale, those families will pay a premium price for your house, because it’s in a good school district.”
A Scotts Valley realtor who doesn’t have kids in the district, David Bergman, whose son is in college, said, “Homes associated with great schools generally sell faster, in good markets and bad. The quality of schools is at the top of the ‘must have’ list for most prospective buyers.”
Realtor Neil Langholz, whose kids attend school in Santa Cruz, spoke about school parcel taxes in general.
“I don’t want more property taxes,” he said. “But I don’t want to see the results of not supporting schools. If schools aren’t funded properly, that can lead to kids not being engaged. And if kids aren’t engaged, they might find trouble.”
Scotts Valley Realtor Kurt Useldinger’s children are homeschooled, but he would benefit from passage of the parcel tax, because he gets some funding from the district. He sounded a note of caution about the parcel tax.
“State and local governments are broke,” he said. “They have to increase property tax to pay for services. As more fees are added to property tax bills, that cost gradually makes housing less affordable, and in the long run, that could hurt property values.”
But Useldinger added that $48 a year for three years is “a little amount to pay.”
I agree. And homeowners are likely to get back many times that amount if the tax helps Scotts Valley maintain the premium home prices that come with excellent schools.
Mark Rosenberg is an investment consultant for Financial West Group in Scotts Valley, a member of FINRA and SIPC. He can be reached at 439-9910 or [email protected].