PHOENIX – The West Contra Costa Unified School District's settlement of a lawsuit over parcel tax revenues is a potential credit hit for parcel tax levying school districts in California and a boost for charter school credits, Moody's Investors Service said.
The district announced March 3 that it had settled the suit brought by the California Charter School Association, which alleged that the district denied charter school students an equal opportunity to quality education by excluding charters from sharing in district parcel tax revenues. West Contra Costa taxpayers approved the district's Measure G parcel tax in 2012, which generates approximately $9.7 million in revenues annually, or 3% of the district's general fund revenues.
"The settlement has the potential to reduce parcel tax revenues available to districts, one of the few sources of revenue that a California school district can raise on its own," Moody's said. "The potential impact of this decision on California charter schools is positive, and potentially significant for individual schools in parcel tax levying districts, given charter schools more limited resources and funding sources."
Parcel taxes levy a flat fee per property parcel, and must be approved by voters with a two-thirds supermajority.
As a result of the settlement, the district will provide 50% of the proportionate share of Measure G parcel taxes to charter schools operating within its geographic boundaries between the 2015/2016 school year through the 2018-19 school year, when the tax expires. Any new charters that open are also entitled to a share, and charters will receive a share of any new parcel taxes enacted during that time.
Districts can decide to share in parcel tax revenues with charter schools located within their boundaries, but only a handful actually do.
The CCSA filed the lawsuit in May 2014, and CCSA president and chief executive officer Jed Wallace hailed the resolution.
"This is a win-win for WCCUSD families," Wallace said. "By excluding students who attend charter public schools from equitable access to resources, the district was creating two classes of students within the public education system, literally disenfranchising charter school students from their fundamental right to education."
