RCSD as a Community-Funded District
RCSD is a community funded district, previously referred to as "Basic Aid". This means that it relies primarily on local property tax revenue to fund its schools, rather than receiving significant funding from the State.
The local property taxes of most school districts are not sufficient to fund the State LCFF funding target and so the state provides the balance of the minimum guarantee amount. These Local Control Funding Formula (LCFF) districts have little concern about property tax levels since the difference between the minimum guarantee and the local property tax is back-filled by the state.
Community funded districts have greater control over their funding. However, they may also face challenges related to fluctuations in property tax revenue and disparities in funding between districts. For example, the property tax revenue RCSD receives from its local community does not compare to that of neighboring school districts such as Menlo Park City School District, Palo Alto Unified School District, Las Lomitas Elementary School District, or Woodside Elementary School District.
Property tax revenue is very uncertain and subject to dramatic changes. This is due to the cyclic nature of property values as well as to limitations on the county information systems. Thus, while the additional revenue that a Community Funded district receives may be helpful, the district’s financial picture must be watched very carefully for signs of change. The district must do long term financial planning and carry significant reserves so that changes in property tax revenue can be accommodated without major impact on programs and services.
Rising Property Values in Redwood City and School Funding:
Property tax is based on assessed, not market values. The vast majority of homes in the RCSD boundary were purchased when property values were much lower and have lower assessed values than homes that have been purchased in recent years. This is a primary reason why RCSD's funding does not compare to that of its neighboring school districts.
Parcel Taxes and Funding for Local School Districts:
On top of base property taxes, local communities also approve supplemental taxes called parcel taxes that add to the base funding collected by the district. Parcel taxes require 2/3 voter approval.
Redwood City last passed a parcel tax in 2016 (Measure U), but some neighboring communities have passed layers of parcel tax that significantly boost the amount of money they are able to spend per student. Redwood City’s parcel tax, Measure U, assesses property owners $85 per parcel. Measure U generates about $1.9 million per year of which $300,000 are allocated to the three local Independent charter schools. In comparison, Palo Alto Unified passed a parcel tax in November 2020 that assesses property tax owners $836 per parcel and generates $16 million per year. While only 2/3 (66.67%) of the vote was required, the school district’s measure passed with 77.44% support.
Enrollment and RCSD Funding:
Enrollment growth is not funded. As opposed to the State LCFF funding mechanism, which pays an amount per student and therefore automatically funds growth, a Community Funded district must pay for any growth from its fixed pool of property tax funds. Therefore, any enrollment growth in RCSD would now adversely affect its finances and the level of program it is able to offer.