San Francisco parcel tax to boost teacher salary a credit positive
A parcel tax approved by San Francisco voters to raise salaries for teachers is a credit positive for the city’s school district, according to Moody’s Investors Services.
Proposition G, which won with 59% in last week’s election, will help teachers living in one of the least affordable cities in the nation, the agency said in its weekly outlook report.
The tax will raise $50 million a year at a cost of $298 per propertyparcel starting July 1 and expiring in 2038. The San Francisco Unified School District will use those funds primarily to increase the pay of its teachers.
The measure “is expected to facilitate recruiting and retaining educators for the district, and local charter schools, amid San Francisco’s very high cost of living," Moody's said.
Supporters of the Living Wage for Educators Act of 2018 say it will help stem the tide of teachers leaving because they cann’t afford to live in the city anymore.
More than 60% of teachers spent more than 30% of their income on rent and of that 14.7% spent more than half of their income on rent, according to a study by the district and Stanford University.
Over the last several years, the district has lost about 400 to 700 teachers a year while many who stay are commuting longer distances, said Susan Solomon, executive vice president of the United Educators of San Francisco, a union representing the district’s teachers.
“What we end up seeing is too much staff turnover in schools and it’s destabilizing for our students,” she said.
As part of a three-year contract negotiated last year, the district’s teachers will see a 4% salary increase next year, Solomon said. The parcel tax will add another 7% boost to their pay, she said.
“This is really significant,” she said. “It will really make a difference. It will mean the difference between people being able to stay and not.”
In its report, Moody’s noted that instruction made up 70% of the district’s billion-dollar budget, which the tax will supplement by 5%.
The parcel tax is the latest of a series of supplemental-funding measures that the district benefits from. Voters approved a $198 parcel tax in 2008, agreed to continue shift a portion of property taxes in 2014 and put in place a 0.25% sales tax for education in 1993.