Earlier this month, a tremor hit Los Angeles—not an earthquake, but the rumbling of taxpayers voting down a real estate “parcel tax.” Had Measure EE passed, the tax—charged by square footage, instead of value—would have raised $6 billion ($500 million annually, over 12 years) for the Los Angeles Unified School District. Owners of apartment and commercial buildings would have borne the burden, to the tune of 16 cents per square foot. For now, the city’s real estate sector has been spared: the initiative, which needed a two-thirds majority to pass, garnered only 46.3 percent of the vote.

The school district and its union, United Teachers of Los Angeles, were confident of passage. In January, Angelinos rallied around the teachers’ six-day strike, and in a recent poll, 82 percent of residents indicated support for more education investment. The measure’s proponents, especially organized labor, outspent naysayers by a wide margin—UTLA alone donated $500,000 to the cause—but their investment and optimism proved futile. The loss embittered Los Angeles school chief Austin Beutner, who suggested that the metro area’s Chamber of Commerce, in its advocacy against the tax, didn’t care about “kids of poverty and kids of color.” UTLA lamented that the schools were “chronically underfunded,” though the union’s president claimed that the ballot initiative had somehow “brought the city of Los Angeles together.”  

Indeed, Los Angeles voters had come together—in agreement that the measure was just another big tax increase. Though campaigners insisted that the tax would affect only landlords and businessowners, voters understood that when property taxes go up, landlords pass some, if not all, of these increased costs on to renters. And when taxes on business go up, so do the prices of the goods and services that these businesses offer.

Many Angelinos voted against the tax simply because LAUSD can’t be trusted. Word has spread that contrary to union rhetoric, Los Angeles schools are not really underfunded. According to the U.S. Census Bureau, Los Angeles ranks seventh in per-pupil spending of the nation’s 25 largest school districts, surpassing Chicago, Houston, Philadelphia, and Dallas. The school district’s financial woes stem from generous pensions and health-care perks provided to current and past employees, along with their spouses and children. A 2017 analysis showed that by 2031, LAUSD will have to allocate half its money annually just to cover pensions and health care.

Other residents voted “No” because of the inept and deceptive ways that the district handled the measure. After the initial ballot draft prohibited the use of tax dollars for “funding long-term healthcare or pension liabilities,” an updated version quietly eliminated that language and replaced it with “legal settlements and liabilities.” One school board member, Nick Melvoin, even admitted that some EE money will never come close to the classroom as long as runaway spending continues.

The ballot’s language kept evolving, and the changes, affecting homeowners and seniors, prompted confusion and anger. Shortly before the election, the board convened and reaffirmed the original wording, which excluded a proposal to tax “the square footage of all buildings or structures erected on or affixed to the land.” The change would have affected homeowners with garages and owners of large apartment complexes.

The entire campaign was an exercise in alienation, with LAUSD relying on taxpayer dollars to advocate passage of more taxes. Beutner released an “informational” video and sent out emails to all district employees urging them to vote and “make their voices heard.” The advertisement included a postscript, asking employees to go online and sign a data-gathering “pledge to vote.” The Howard Jarvis Taxpayers Association justifiably called for an investigation into “improper campaign spending.”

It wasn’t only this that bothered voters. The schools aren’t doing their job. According to a report released in April, less than half of the 2019 LAUSD graduating class is eligible to attend one of the state’s public universities. To achieve eligibility, students need to score a C or better in 15 essential courses, including English, math, and science; just 49 percent could hack it. Meantime, Los Angeles County is threatening to take over the LAUSD if the district can’t prove its solvency over the next three years.

Superintendent Beutner is scrambling. “We’re in discussions about where we go next after Measure EE, locally or at the state level. We’re in discussions with a lot of parties.” Los Angeles County’s Superintendent of Schools, Debra Duardo, disappointed by EE’s failure to pass, added, “Put simply, LAUSD needs to stop spending more than it receives from the state and federal government.” County regulators will be keeping a close eye on the district, remaining on site to monitor its fiscal status. But with a never-satisfied teachers’ union and a district that can’t be trusted as good stewards of taxpayer money, it’s hard to be optimistic about the future of LAUSD.

Photo: MattGush/iStock


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next