LTE - The fallacy of the 79%

Recently certain board members have said we need to focus on “the 79% of the population of Laguna Beach that doesn’t have kids in the school district.” Let’s double-click on this.

Strap in – we’re getting math-y.

The 79% number was taken from the district’s 2023 Annual Report which says the district serves 21.8% of the households in the city. Leaving aside the rounding error, the inference the board member makes is two-fold. First, that 79% of the population are not served by the school district. Second, that these 79% are funding the schools.

The first the “get off my lawn” argument – i.e., there are vanishingly few kids in town who are disrupting the serenity of the other residents. This is primarily what the anti-pool crowd is concerned about – lights and construction noise.

Here, the board is sloppily conflating households with population; 21% of the households have kids, but households with families have more than one person. In fact, closer to 40% of the population are adults and children living together.

The second argument is that these serene, childless residents are subsiding the schooling of those few kids.

Schools are funded from property tax. Laguna Beach’s median tax rate of 1.12% is actually below the county and state rates. On average, a home owned since 1980 will pay about 10% of the same house purchased in the last five years.

The city generates around $200m in property tax per year. By state mandate, about 25% goes to the city and about 25% goes to the schools; an additional 20% goes to support underfunded schools. So, the district gets $50m; the city gets $50m.

More than 20% of our housing stock are second homes that pay taxes but don’t use services. These taxes subsidize residents in every aspect of the city – from the school district to Susi Q.

Additionally, 50% of the housing stock in Laguna Beach has turned over in the last 20 years. The vast majority of these sales were to young families or to second homeowners who pay higher tax rates.

There is one more very important point: LBUSD is bigger than the city – it includes Emerald Bay, Irvine Cove, Crystal Cove and parts of Aliso Viejo. This is a large, affluent area with literally billions of dollars of property value paying taxes netting more than $20m for our district.

We have a large tax base supporting a relatively small population of residents of all kinds. Citizens should embrace the school district’s efforts to modernize facilities as it allows the city to focus on other priorities.

In sum, “the 79%” are not actually 79% and they are not subsidizing kids.

One more point, at various times I have heard citizens question why we would invest anything in the schools since our population is declining. I find this profoundly nihilistic and depressing – to suggest we should all just sit back and watch the town die. Moreover, it will be a self-fulfilling prophecy as families will no longer move into town for our amazing schools. As houses turnover, they will be bought by out-of-town people who have no connection to the vibrant heart of our community resulting in a place that is dead nine months out of the year.

We are endowed with an immense natural, cultural and historical legacy which we should all endeavor to preserve.

Newth Morris (proud father of three kids in the district)

Board Member, FUEL

Laguna Beach