On Tuesday, the voters within the boundaries of the Los Angeles Unified School District will ultimately decide if Measure EE will pass, levying a $.16/SF tax on every square foot of indoor space on both residential and commercial property. The system is the nation’s second-largest school system and has been clamoring for new revenue including going on a weeklong strike earlier this year.

What is the tax?

Over 2/3rd of the voters need to vote yes for the measure to pass. This tax would actually be in the mold of a true “parcel tax” as it is directly tied to only the square footage of the property, not the actual value of the property. Measure EE if passed, would go into effect for 12 years with a projected $500,000,000 in new revenue for the district.

Who would be responsible for the tax?

The parcel tax fee per square foot would ultimately not apply to parking garages and land parcels. The property owner ultimately would be responsible for the tax, but some tenants could be on the hook under some triple net lease arrangements (NNN) where the owner would also pass through this tax.

Where will the money go?

The money has been earmarked to go towards the general operating budget of the district. Some charter schools as well would see a tremendous benefit from the new parcel tax Measure EE would seek to create.

Property owners aren’t happy including strong remarks from Maria Salinas of the Los Angeles Chamber of Commerce stating, “We understand the financial picture at LAUSD and the importance of committing resources to provide a quality education for all our students; however, Measure EE is not the answer.  This ballot measure is excessive and based on square footage, unfairly disadvantages multi-family and commercial properties. Measure EE will place a significant tax burden on property owners and renters, who are already facing an affordability crisis. Additionally, LAUSD has no plan for reform or budget planning to ensure long term sustainability, nor a requirement for independent oversight.”

We won’t have to wait long to see what happens with this potential major reform.