Why LAUSD's Measure EE to Fund Schools Is On Shaky Legal Ground

L.A. Unified School District Superintendent Austin Beutner addresses reporters following union negotiations with United Teachers Los Angeles in this Monday, Jan. 7, 2019 file photo. (Photo by Kyle Stokes/KPCC)

Remember the end of the Los Angeles teachers strike? School district officials, teachers union leaders, even the mayor all stood together at a podium at City Hall and proclaimed with one voice: the L.A. Unified School District needs more money.

One plan to raise that money is a measure on the June 4 ballot to enact a parcel tax — a type of property tax.

But a last-minute change to the text of the proposal, Measure EE, has now prompted a lawsuit that could jeopardize the district's plans to create a new source of funding to pay for the settlement that ended the strike.

The Howard Jarvis Taxpayers Association, which opposes tax increases, announced Tuesday it is suing to block Measure EE. The suit says LAUSD Superintendent Austin Beutner ordered a significant change to the ballot language after the school board had already voted to send Measure EE to the ballot.

The lawsuit names as defendants both the L.A. Unified School Board and L.A. County Registrar-Recorder/County Clerk Dean Logan, who, the lawsuit asserts, might have prevented the controversy by refusing to grant Beutner's request for a change without a new school board vote.

"This lawsuit has no merit," said LAUSD general counsel David Holmquist. "The conversation should be about the need to adequately fund our local schools."

"None of this is legitimate," said Yusef Robb, a spokesman of the Yes on EE campaign. "This is a political smear mounted by conservative corporate interests."

LAUSD board members voted Tuesday on a resolution aimed at clarifying some of the confusion:

Still, two attorneys who focus on property tax issues said the district made mistakes in the process of sending Measure EE to the ballot — mistakes that could now, at minimum, leave the revenue-generating measure in legal limbo. (Both spoke to KPCC/LAist before news of the lawsuit broke.)

"This casts a legal pallor," said UC Davis law professor Darien Shanske, "that possibly, theoretically, could prevent [Measure EE] from getting voted on — or if it did get voted on, could still get it tied up in court."

WHAT IS THE CONTROVERSY ABOUT?

At issue: the types of structures that would be subject to Measure EE's 16-cent-per-square-foot parcel tax.

The ballot language board members approved in February didn't clearly address this point. Certainly homes would be taxed — but what about pools, storage sheds, parking lots, or other structures? So after the vote, Superintendent Austin Beutner ordered the legalese changed.

In making this change, Measure EE opponents say LAUSD officials overstepped, making more properties subject to the parcel tax without a vote of the school board.

Here's the ballot language the school board approved on Feb. 28, which called for a tax on all "habitable main square footage":

Pasadena-based attorney Kevin Moore said the word "habitable" is "a vague and ambiguous term" that would be meaningless to the L.A. County Assessor's Office.

"It's a term they don't really use in the property tax world," said Moore, who has handled property tax cases for business clients for around 15 years. "Your guess is as good as mine as to what it was going to apply to."

So after the board's Feb. 28 vote, Beutner ordered the ballot language changed to remove the word "habitable." The revised language called for a parcel tax on "all buildings or structures erected on or affixed to the land":

"The discrepancy has a huge impact on the nature of the text," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "Voters have a right to know what they are voting on and, if it is a tax measure, the extent to which they are taxed."

The lawsuit "seeks an order stopping the counting of the ballots as well as the certification of the election results," according to a press release from the association.

WHAT THIS ALL MEANS

Both Shanske and Moore said this new language — taken literally — would mean a much broader range of properties could be subject to the Measure EE parcel tax.

The question is whether Beutner had the authority to make such a change and whether he strayed from the school board's wishes in placing a broader parcel tax measure on the ballot.

"I think it goes beyond the scope of what the board voted for," Moore said. "In fact, from what I've read, the board intended it to be limited."

"When Mr. Beutner removed the word 'habitable,'" Moore added, "that it's going to apply to all buildings and structures, that goes beyond just clarifying; it goes against what the board was trying to do."

Shanske differed slightly, saying it wasn't necessarily clear that Beutner strayed from his mandate to carry out the school board's wishes.

Shanske — who, again, spoke to KPCC/LAist before the Howard Jarvis Taxpayers Association announced the lawsuit — said it wasn't even clear that the error would doom Measure EE in court. Shanske said judges recognize local governments make mistakes and, so long as they're acting in good faith, deserve a chance to remedy those mistakes.

But Shanske said the discrepancy will nonetheless "cast a cloud" over Measure EE's future.

"It's an own-goal by the school board," Shanske said. "Clearly, this is an irregularity. You don't usually have to correct the ballot language that the school board approved."

DAMAGE CONTROL ATTEMPTS

On Tuesday, school board members passed a resolution "confirm[ing] its intent" to exclude parking lots and garages from the parcel tax. The resolution was set for a vote before news of the lawsuit emerged.

It's not clear what effect that vote will have. Mail-in ballots for Measure EE have already gone out.

"This resolution is yet another illustration that the LAUSD cannot be trusted and that this property tax measure was rushed onto the ballot," read a statement from Tracy Hernandez, a leader of the campaign against Measure EE and CEO of the L.A. County Business Federation, or "BizFed."

Hernandez added: "Why does the board think it can amend the text of Measure EE less than four weeks before the election? The truth is: they can't."

Robb, the Yes on EE spokesman, called opponents' response "nonsense from a campaign led by corporate lobbyists whose clients simply do not want to pay their fair share."

Beutner also issued a statement of his own:

"The conversation about Measure EE should be about the imperative to adequately fund local public schools in all of the communities we serve. Let's not be distracted from this imperative."