Coronado Taxpayers Association for Excellence in Public Education Endorses NO Vote on Prop E
The members of the Coronado Taxpayers Association for Excellence in Public Education unanimously endorse a NO vote on Prop E on June 3 against the $29 million face value of General Obligation (GO) Bond debts CUSD seeks staggered in 3 issues to be repaid, with interest, by all Coronado property taxpayers. Foreseeably, these 3 tax hikes would be passed through to renters as rent hikes and customers as price hikes.
It’s clear that Prop E can’t possibly do any of the things that well-intentioned voters want to believe it would do. Prop E is unjustifiable. That’s why we see emotional melodrama, including scape-goating the State of California, but no actual legal or factual evidence to support Prop E. Voters who remain calm and open their eyes will see the giant mountain of hard evidence against Prop E right in front of them.
Here’s one of the Big Lies that CUSD has told so often that well-intentioned parents have been worn down to accepting it as true, but it’s false: “If Prop E doesn’t pass, CUSD will cancel math/science/arts/extra-curricular programs, lay off teachers, and place 40+ students to a classroom. Classes with 20 or fewer students will be automatically cancelled. If you don’t vote for Prop E, then your child(ren) won’t have math/science/arts/extra-curricular classes next year.” CUSD has resorted to cheap scare tactics and empty threats because if voters knew the truth, they would vote NO on Prop E on June 3.
Here’s the Actual Reality that voters must understand: If Prop E doesn’t pass, CUSD will simply have to cut out the many millions of dollars of gross waste in spending. Programs, teachers, classes will remain intact. The California State Department of Education has strict education guidelines that CUSD must follow. CUSD can’t decide on its own to cancel math and science classes and refuse to provide education to children. If CUSD deviated from State education guidelines, heads would roll at CUSD. The County Department of Education has confirmed that when Prop E fails, CUSD can’t cancel classes and refuse to teach students. Source: County Department of Education Contradicts CUSD article.
Every NO vote on June 3 is important because merely 55% of participating voters could force these expensive property tax hikes on ALL of Coronado, including all business owners and second homeowners, a large number of which are non-voting members our community. Active duty military would be the largest group of renters to suffer from pass-through rent hikes.
Top 10 Reasons To Vote NO on Prop E
Here are the top 10 reasons to vote NO on Prop E on June 3:
- School Pool Boondoggle
- CUSD Funding has INCREASED, not Decreased
- Incomplete Information / Pending Lawsuit Against CUSD to Open CUSD Books
- Student Performance Unaffected
- Generous Funding
- Gross Waste.
School Pool Boondoggle
Prop E is a sneaky School Pool boondoggle bailout. CUSD placed a vague phrase near the end of its Full Text Ballot Measure (“…Project List also includes the re-financing of any lease obligations…”) which proves that Prop E’s new GO Bond debts would pay off the School Pool’s old debts (called Certificates of Participation, or COPs, which are actually “lease obligations”). Source: Ballot pamphlet page PR-1301-10, eighth sentence up from bottom of page.
While CUSD deserves some credit for honesty (they openly admit their intent to use bond money to “free up” General Funds and other funds for class size, teachers and programs), CUSD also deserves strong condemnation for dishonesty (it’s illegal to use GO Bonds in that way). Sources: California State Constitution, Article XIII A, Section 1 & Article XVI, Section 18; CUSD’s Prop E “Fact” Sheet, March 2014.
CUSD’s threat is silly that “the State will shut down or take over CUSD if Prop E doesn’t pass.” A school trustee publicly admitted “CUSD doesn’t need the school bond” and “CUSD will be okay if Prop E doesn’t pass.” Voters would be surprised to hear the things discussed in school board closed sessions that are kept secret. Voters who ignore this CUSD trustee’s admission that CUSD doesn’t need Prop E, and who would vote for Prop E in a desperate panic, choose to send the message to CUSD bureaucracy to “Shut up and take our money!” Source: Mark Gilliland’s April 23 “Prop E-ven More Confusing” letter in a local weekly paper.
CUSD Funding INCREASED, Not Decreased
Another one of CUSD’s Big Lies is that the “Prop E property tax hike is necessary because the new State formula decreased State aid to CUSD.” In reality, total funding to CUSD was INCREASED in 2013 by $3.2+ million. CUSD sits in an affluent town where each year property taxes increase naturally under Proposition 13. Other school districts aren’t so lucky. They don’t receive such windfalls in funding. In fact, in 2013 CUSD received an $8,058,501.00 INCREASE in our local, Coronado property taxes. You’re welcome, CUSD, not that you ever thanked us. Where did CUSD spend their funding windfall? Did CUSD spend it on the children? Or did CUSD spend it on those raises for the superintendent, for other administrators, for the School Pool boondoggle, for other wasteful items? The 2013 audit says that CUSD received $35,735,615 in revenue, but it spend more than that. The audit says CUSD’s 2013 expenses were $36,481,855. So in 2013 CUSD spent $746,240 more than it took in for 2013 (revenues minus expenses = overspending). That’s not a financial crisis. That’s a garden variety failure of CUSD bureaucrats to live within their means. It’s a sign of wasteful overspending that CUSD can cut out without needing the Prop E property tax hike. Sources: Christy White Associates 2013 CUSD Audit, page 7 & Coronado Patch May 4, 2014 article Coronado School District Lied about Decreased Revenue.
Prop E ringleaders’ promise is misleading that the tax hike would “only” cost homeowners “an additional $280 annually for 10 years at 1% low interest” on bond principal. In truth, the tax hike would cost most property taxpayers much more money for a much longer time period because legally we could be forced to pay “up to 12%” high interest rates on bond principal for the long duration of “up to 40 years.” CUSD could legally impose a tax hike that is up to $60 annually per $100,000 assessed property value, regardless of its unenforceable promise that it intends to hike all property taxes by “around $40 annually per $100,000 assessed property value.” In the worst of both worlds, Prop E gives CUSD sole discretion to determine the timing of the three bond debt issues, but CUSD isn’t in control of the bond market interest rates. Sources: County Counsel’s Impartial Analysis, Ballot Pamphlet, page PR-1301-1 to 2; CUSD’s Tax Rate Statement, Superintendent’s Untitled Legal Disclaimer, Ballot Pamphlet, page PR-1301-3.
Incomplete Information – Pending Lawsuit Against CUSD to Open Books
San Diego County Taxpayers Association (SDCTPA) found so many serious problems with Prop E that they refused to recommend it. SDCTPA requested, but CUSD failed to provide the estimated cost of the items in their Project List except for “annual (building) maintenance costs and COPs (School Pool debts) payments” that CUSD chooses to pay with Redevelopment pass-through funding, which CUSD seeks to “off-set” with Prop E bond proceeds. Prop E is a slippery slope because CUSD should be able to pay for building maintenance and School Pool debts without resorting to additional expensive public debt financing through school bonds. In addition, CUSD failed to meet SDCTPA criteria in 3 areas of the Prop E bond program: Description, Budget & Funding, and Execution Plan. Also, CUSD’s stated intent in its Project List to spend Prop E bond proceeds on technology sets a dangerous precedent. In other school districts, taxpayers discovered what a waste it is to spend expensive bond debt money on technology, such as iPads, that become obsolete, broken or stolen before taxpayers have finished paying off the principal and interest on the school bonds. Source: SDCTPA’s Analysis of Proposition E, 2014.
Two months ago in February, CUSD trustees voted unanimously for CUSD to place this tax hike on the ballot in June. That’s the bum’s rush because voters are scrambling to find information which CUSD failed to provide.
Last year in June of 2103, long before the public knew Prop E was going to be on the June ballot, CUSD was sued in court by a representative hired by Coronado taxpayers. The purpose of the lawsuit is to open CUSD’s books and review CUSD’s bank statement for a forensic audit. A forensic audit is the only way for taxpayers to follow the money to see how CUSD spent our tax dollars. The case is Uremovic v. CUSD, case number CN 37-2013-0006092-CL-BL-CLT. This Friday, May 9, at 8:30 am in Department C-62 in the downtown Courthouse on Broadway in San Diego, CUSD has been granted a hearing on its motion for Summary Judgment to dismiss the case. CUSD assistant superintendent Keith Butler filed papers with the court in advance of the hearing in which he stated that he will testify this Friday that CUSD bank statements don’t exist, that he hasn’t ever reviewed a bank statement, that if the bank statements exist they are secret and taxpayers aren’t allowed to look at them to follow the money and see where our tax dollars went. Basically, CUSD’s position is that, unlike all other public agencies, CUSD can simply refuse to comply with the California Public Information Act. Sources: Libi Uremovic website page, Coronado School District Audit section; CUSD Refuses to Open Its Books & Bank Statements article; CUSD Sued in Court for Hiding Its Bank Statements article.
CUSD’s claim is wrong that the Prop E tax hike is “right-sized.” We already pay extremely high taxes/fees/rates on the local/state/federal levels. Two existing property tax hikes for public education will continue to appear annually on our property tax bills for at least the next decade – CUSD’s Proposition KK (1998 school bond debt refinanced in 2012) and Southwestern Community College’s Proposition R (2008). This year CalAm raised our water rates around 20%. The mayor and councilmen already voted twice to raise our city Wastewater fees (taxes). There are more related wastewater fee hike votes to come in the near future. Voters should also expect additional tax/fee/rate hikes and/or public debt financing schemes for the city’s Stormwater, Golf Course Irrigation project, and off-balance-sheet Pension & Redevelopment Debts. Enough is enough! Sources: Property Tax Bill from County Tax Collector; CalAm Water Bill; City Council Meeting video 18 Mar 2014, scroll down to Agenda Item 11b, Wastewater Enterprise Fund Financial Strategies Workshop; City Council Meeting video 6 May 2014, scroll down to Agenda Item 11c, Setting of Public Hearing Date on the Proposed Wastewater Rate Structure.
CUSD’s claim is false that Prop E would “maintain the quality of education.” It’s widely known that since 1974 California public school test scores have remained the same while school spending has skyrocketed, especially compensation for administrators. Academic achievement is unaffected by spending increases OR decreases. Supportive families help students excel, not throwing more money at schools in a desperate panic. Sources: U.S. Department of Education & National Assessment of Educational Progress (NAEP) tests in damning chart in www.KissTheSchoolBondGoodbye.com April 8, 2014 article World Famous Think Tank Proves Prop E Won’t Maintain Quality of Education, Vote NO on Prop E.
CUSD’s doomsday prediction isn’t accurate that they’re “running out of” our tax dollars to spend (waste). Under the new funding formula, the State will give CUSD an “increase in Average Daily Attendance (ADA)” aid as well as “$1.4 million in additional funding” according to CUSD. Plus, every year CUSD “rakes in”: Local Property Tax Increment aid (43% of the increase in the property taxes collected . . . remember our individual property taxes increase ever year by 2% under Prop 13 . . . and the TOTAL local property tax revenue collected in Coronado increases SUBSTANTIALLY every year because of the mayor-council-manager’s overdevelopment policy . . . so CUSD receives large INCREASES every year of our ever-increasing local property taxes collected in Coronado . . . with that easy racket, CUSD should be able to live within its ample means); Federal Impact aid (our federal tax dollars) for military dependent-students at CUSD; Redevelopment Pass-Through (our tax dollars essentially diverted from paying down CUSD’s non-voter approved Redevelopment debts); Coronado Community Grants aid (our tax dollars from the City’s General Fund); the new Coronado City-CUSD Joint Powers Authority aid (our tax dollars from the City’s General Fund) voted into effect earlier this year by the conflicted mayor and the city council; Development Impact Fees (direct payments from developers who build in our city); Private Donations (fundraising through the troubled Islander Sports Foundation and the Coronado Schools Foundation); and more. Also, CUSD receives monthly rental income on its Glorietta Ground Lease for the prime property CUSD owns adjacent to the hospital. Source: Coronado USD Budget “Facts” 2014, updated 25 Mar 2014 & CUSD’s Glorietta Property Lease.
CUSD’s claim isn’t valid that trustees “can’t cut their way out” of their self-created budget woes. CUSD’s wasteful spending includes, but isn’t limited to: School Pool ($722,000.00), Outside Consultants ($4.1 million), Technology ($2.9 million), Outside Contractors Service & Repairs ($1.7 million),Travel/Conferences ($287,000.00), Dues/Memberships ($112,000.00), and more. Source: CUSD Purchase Order Reports, July 2011-September 2013. CUSD hasn’t disclosed to the public its Purchase Order Reports from October 2013 to the present date. Why does CUSD lack public transparency? What is CUSD hiding?
Prop E is Divisive
We’re disappointed that CUSD officials chose to divide our community with Prop E at a time when we should join together to solve the many financial problems of CUSD and the City, instead of kicking the debt can to the next generation.
Prop E Violates Our Proposition 13 Constitutional Protection Against Unreasonable Property Tax Hikes
In 1978, Proposition 13 was passed by the People of California on the June ballot. It resulted in an amendment to our State Constitution. The Proposition 13 constitutional amendment, called Article 13A, is a life preserver that protects taxpayers from drowning in unreasonable property tax hikes. Proposition 13 limits property taxes to 1% of our assessed property value, but the Prop E tax hike would increase our property taxes above that 1% constitutional limit. School districts, cities, other agencies have been trying to chip away at Proposition 13 since the People enacted it. Remember in the Unaffordable section above that CUSD’s Proposition KK (1998 school bond debt refinanced in 2012) and Southwestern Community College’s Proposition R (2008) will continue to burden us as tax hike violations of Proposition 13 for at least another decade. School bonds violate our Proposition 13 constitutional protection against unreasonable property tax hikes. Prop E is yet another way for CUSD to chip, chip, chip away at our constitutional protection againnst unreasonable property tax hikes. Source: California State Constitution, Article 13A (Tax Limitation).
Prop E is Just Another Credit Card for CUSD to Max Out
We’re concerned because if Coronado voters force a property tax hike on all property owners through this Prop E school bond, then the State may further reduce funding to CUSD in the future as the new Local Control Funding Formula is being implemented over the next 8 years, or beyond. Then CUSD will think it’s okay to keep coming back with their hands out, like a spoiled child, for another credit card and another and another after maxing out each credit card voters give them in the form of additional school bonds. When will it end? The smartest way to stop this abusive financial cycle is to not start it in the first place.
Vote NO on Prop E on June 3
To read Game Over: 7 Bombshells Obliterate CUSD’s Campaign for Yet Another Property Tax Hike, Vote NO on Prop E on June 3, click here.