The Los Angeles Unified School District is having some financial difficulty and they want property owners to bail them out. But LAUSD’s financial problems only seem to get worse every time voters give them some additional money. Combine that with the fact that adding a large parcel tax to real estate when prices are already depressed is only likely to depress prices even further, and you have the makings of a really bad idea.

LAUSD’s financial problems have nothing to do with lack of funding from voters. In 2008, voters authorized $7 Billion in construction bonds; the largest school bond authorization in the district’s history. In the ten years prior to that, voters had approved four other multibillion dollar bond initiatives.

In return for that trust, the school board managed to build one of the most expensive school’s in history on a toxic waste site. It then proceeded to build another school – at a cost which exceeds $500 million – on the site of the old Ambassador Hotel. In that second construction project, they actually had the audacity to use construction materials that included gold leaf for decorative materials.

The district also purchased a headquarters building in downtown Los Angeles for $154 million in 2001. Since the purchase, they have spent millions on renovations to the facility, including building and remodeling private bathrooms in the offices of Board of Education members. They haven’t exactly been good stewards of the money entrusted to them.

Now the board is asking that property owners pick up the tab for their mismanagement. This week, they voted to put a tax of $298 per parcel on the June ballot. Just think about that. If you own a home appraised at $300,000, they want you to vote to increase your property taxes by 10%! That’s an astonishing request; especially when you consider that unemployment in LA is still above 11%.

LAUSD hasn’t just been a poor manager of the people’s money. They have also proven that they can’t manage their own property very well either. At one high school that I’m aware of in the Valley, they actually store old furniture under the bleachers. You can see that furniture – much of which is made out of wood – every time you drive by the school. And it just sits out there, even when it rains. It has been ruined for no good reason.

A better idea for the district might be to unload some of the property it owns – including its HQ building – and to have regular garage sales. Or how about cutting back on their massive administration and seeing to it that the money that they do have actually makes it into the classroom?

About the only thing that this measure will accomplish if passed is that it will made it even more difficult to obtain financing on a home. That will depress prices further and it certainly makes the idea of living anywhere within the LAUSD boundaries even more unattractive. I might feel differently if the district had proven through its past actions that it actually uses its resources wisely, but there is absolutely no evidence of that.

Oh, and don’t just think that if you are a renter that this doesn’t impact you. Even if you live in a rent controlled building, landlords are allowed to pass increases such as this on to you on an annualized basis. Renters who vote in favor of this measure are really voting to price themselves out of the housing market and for a rent increase of their own. Nothing in life is free.

Share and Enjoy