The Canary in the Gold Mine

Voters in Marin County have long been willing to pass parcel taxes to fund their schools. In 2016, taxes faced unprecedented opposition from local activists; taxes in Kentfield and Mill Valley were defeated or passed by previously unheard-of narrow margins, respectively.

What changed? This case study uses district financial and demographic data as well as interviews and focus groups with advocates and education leaders to answer this question. It was clear that:

• The current financial situation is not sustainable. Because of rising pension costs, other rising costs, and factors such as declining enrollment, Marin school districts are making cuts to services or plan to do so in the near future.
• There is a tension between teacher compensation and recruitment. Despite their financial constraints, districts feel immense pressure to increase teacher salaries in order to recruit and retain teachers in high-cost Marin County. Increasing pension costs are diminishing the flexibility afforded by the Local Control Funding Formula (LCFF) to fund local programs and priorities.
• There is strong support for teachers and programs for students, but even in Marin County, where the community is engaged and well-informed, there is limited public awareness of district flexibility to respond to the impacts of rising pension costs.
• Due to growing concern that dollars are not reaching schools, but instead being used to fund pensions, parcel taxes have faced increasing opposition in Marin County.

This case study also offers lessons for local and state education leaders, including:

• Districts facing real and unavoidable cost increases simply need more funding. Addressing student needs simply costs more than California has spent for decades. If state and local leaders want to fully support student success and stop seeing districts enter financial distress, they will need to find additional revenues.
• Education leaders must continue to build awareness of the impact of rising pension costs, and work together to identify solutions. Pension costs have become a contentious issue in Marin County and are likely to become contentious in other parts of the state. At the same time, benefits (including pensions) and salaries are key to retaining teachers.
• Given the increasing vulnerability of local taxation, state and local advocates should prioritize a statewide funding solution. State and local leaders should heed the lessons of increasing anti-tax sentiment in famously progressive Marin. Statewide and local leaders must prioritize the development of a statewide education funding solution that does not increase reliance on local taxation.

This report is part of a two-case series looking at the implications of district budgetary challenges in Marin County and Sacramento City Unified School District.