“Less than the cost of a latte”? Really?

By Tricia Crane

Editor's note: A previous version of this opinion piece miscalculated the amount paid by property owners if Measure SMS passes. The annual tax for a property assessed at $1 million would be $380, not $456 as originally stated.

October 9, 2018 -- The school facilities bond on the November 6 ballot –- Measure SMS -- has financial uncertainties for all Santa Monica residents -- renters, condo and single-family home owners, and apartment owners alike.

Projected to cost us $1 billion with interest by 2054, critics of the largest school bond in Santa Monica history call it “a blank check.”

They point to school bonds in other neighboring cities where the practice is to identify projects to be funded before they put a bond measure on the ballot.

In 2016 Manhattan Beach asked voters to support a bond for specific facilities. Palos Verdes recently delayed their school bond because they weren't ready with a specific plan.

In Santa Monica the school district has no facilities master plan in place and the school board will decide what they want to do with the bond money after voters pass it.

The same was true of the 2006 school bond, which one school board member acknowledges had disastrous results because it lacked specificity and “wasted millions of taxpayer money designing projects that were never built.”

Specificity is also lacking in terms of how much money SMS will cost residents.

Renters will find nothing on the Sample Ballot to spell out what they should expect to pay each month if the school bond passes. Not until a few days ago, after people complained to the Yes on SMS Campaign Committee, did the committee update the campaign website to include language about the possible cost to renters.

Said one unhappy Rent Control Board commissioner, “I'd heard people asking folks to publicly endorse the bond without having any information about how the bond would affect the pass-through (to renters), which I find really, really disconcerting."

The newly updated YES on SMS campaign website now reads:

"For SMS, the estimated average surcharge increase per rent-controlled unit will be approximately $3.50 per month, which comes to about 12 cents a day. This is less than the price of a latte."

Where did that $3.50 a month come from?

Shawn Landres, co-chair of the Yes on SMS Campaign offered no data or explanation to support the monthly $3.50 fee. Instead, he passed the buck. “Methodology is a question for the district,” he wrote in an email.

When contacted to provide the supportive data for the $3.50 additional monthly tax to renters, school board member Jon Kean said, “The $3.50 figure was researched and calculated by our bond finance team. . . I’m comfortable with their numbers.”

But many are not so comfortable. They aren’t sure $3.50 is accurate. They regard the "less than the price of a latte" language as a way to win votes for Measure SMS by making it appear to the 73 percent of residents who are renters that they can vote “YES” on SMS without bearing much cost.

As a concerned Rent Control Board commissioner expressed: “It depends on so many factors like when the property last sold and Prop 13. . . We need information... Such a lack of attention being paid to the financial impact of the bond measure for both renters and property owners.”

“The more units that are subject to the surcharges that exceed the cap, the more overflow burdens are passed on to property owners,” the commissioner said.

Renters in rent-controlled units already pay a portion of various surcharges on their landlord’s property taxes, including a Community College Bond, Unified Schools Bond, Stormwater Fee, Clean Beaches Parcel Tax and School District Parcel tax.

In March the Rent Control Board voted to set a “cap” on the total surcharges landlords can pass through to a maximum of $35 or 4 percent of the monthly rent, whichever is lower.

For property owners (condo, single family home and apartment owners) there is language on the ballot that says “the best estimate” is that SMS will cost $38 to $40 per $100,000 of assessed value.

According to multiple realtors, the average single-family home in Santa Monica is assessed at $1 million. Taking the lower rate -- $38 additional tax per assessed $100,000 -- if a property is assessed at $1 million, the owner will pay $380 more on your property taxes each year if this school bond passes. In 10 years, that’s $3,800.

There is no senior exemption, but that’s not written on the Sample Ballot or the ballot either. Last week the senior information was added to the YES on SMS campaign website after complaints were made. It now reads: “State law does not authorize senior exemptions for general obligation bonds.”

In the end it appears there is no cost certainty in the bond measure for renters or property owners. The very last paragraph of the Tax Rate Statement reads as follows:

“The attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts and are not binding ...”

In the coming month before the election we can all expect a flood of glossy mailers expressing support for the school bond from organizations and individuals who represent themselves as “acting in the public interest.”

Supporters funding these ads include businesses that do construction and repairs, businesses that have worked for the school district before and want the new contracts SMS could generate.

As for the those of us who live here, if Measure SMS passes on November 6 we will just have to get used to enjoying fewer lattes. And maybe forego a new roof on the house.

Or we can vote NO on Measure SMS and send a message to the school board: Work on a facilities plan and come back to the voters in the 2020 election with specific information and an honest campaign about the cost to us and what you plan to do with our additional tax dollars.

Tricia Crane is chair of Northeast Neighbors neighborhood association and former chair of the Special Education District Advisory Committee for SMMUSD