49ers Stadium Only $26 Million Net Boost for Schools, But Revenue Starts in 2011-12
By Carolyn Schuk
Facing a $12 million shortfall caused by declining local tax revenue and a catastrophic state budget deficit, Santa Clara Unified School District is looking for ways to close the gap in the short term, as well as ways to stabilize school finances in the long term.
The proposed 49ers stadium may be one of those strategies. That's because of Redevelopment Agency (RDA) tax pass-throughs – payments that are legally mandated if Santa Clara's redevelopment plan is amended to allow the agency to incur new debt – that will flow to SCUSD schools over the next 15 years.
The County Office of Education and West Valley-Mission Community College District would also benefit. Other districts that are inside Santa Clara city boundaries – Campbell Union, San Jose Unified, and Cupertino Union – would not.
But the stadium "boost" is $26 million, not $133 million – or $141 million – that some are reporting. That's because if the stadium isn't built, the district will still receive an additional $107 million over the same period from Redevelopment Agency property tax reversion – incremental tax revenue (from higher property values) that's diverted to repay redevelopment bonds. When the bonds are repaid, the tax diversion ends.
However, as any businessperson knows, total dollars is only part of the story. How soon those dollars start coming in – cash flow – is equally important to financial health. In the case of the Redevelopment Agency tax reversion, that money doesn't start flowing to SCUSD until 2020-2021 ($12.7 million, jumping to about $22 million in 2023-24).
That 10-year wait means any measures to close the school district budget gap – layoffs, cuts in after-school sports and recreation programs, eliminating summer school and adult ed, furlough days, larger class sizes, a parcel tax – are almost certain to be long-term.
On the other hand, if the stadium is built, SCUSD starts seeing additional revenue in 2011-2012, with $382,000 additional revenue that year, jumping to $2 million the following year and growing by roughly $2 million a year until 2020. The additional revenue for the schools adds up to $53 million between 2011 and 2020, so district cost-cutting measures are likely to be temporary and short-term if the stadium is built.
But the district isn't presenting a brief for the proposed stadium, stresses SCUSD Board Member Andy Ratermann. "The school district hasn't taken a position on the 49ers stadium. We are planning for both cases – with and without the stadium."
The next meeting of the SCUSD Board is July 7, 2009, 6:15 p.m. in the District Office Board Room, 1889 Lawrence Road. For more information, visit www.santaclarausd.org. If the intricacies of redevelopment finances have you scratching your head, the City of San Leandro offers a very readable Q&A on the subject at www.ci.san-leandro.ca.us/slredevfaq.html.
Carolyn Schuk can be reached at cschuk@earthlink.net.
