The Palo Alto Unified School District School Board members are directing staff to draft a possible renewal of the district’s parcel tax, which they could decide to put before voters in the spring, according to comments they made at a meeting two weeks ago.

According to the PAUSD BoardDocs website, the parcel tax, a voter-approved local property tax that supplements district funding, is set to expire in 2027. The parcel tax currently provides approximately $16.5 million per year in unrestricted local funding. Without renewal, PAUSD would face a $17 million annual loss beginning in fiscal year 2026–27, resulting in immediate structural deficits.

Board President Shana Segal, who will give up the gavel in December, told the board at the Nov. 4 meeting that she supports the renewal, as the parcel tax provides funding for a smaller staff-to-student ratio and other support staff.

“As someone who has taught and who … also substitute taught in PAUSD, I can say with certainty that smaller class sizes, librarians, counselors, instructional specialists, all the aforementioned qualities — they matter, and they can help us to increase the number of students who feel a strong sense of belonging,” Segal said.

According to former Board of Education President Todd Collins, PAUSD’s annual funding per student is following a steep increasing trend — the funding per student today is around $35,000, more than double what it was 10 years ago, with these numbers set to grow.

“That good news is a result of two long-term trends: rising property tax assessments and declining enrollment,” Collins said during the open forum. “In Basic Aid districts like ours, if property taxes go up and enrollment goes down, then funding per pupil just shoots up. It’s just math.”

Board member Josh Salcman said that despite the district’s high per-student funding, the rising cost of living limits how far those dollars go.

“That sounds like a lot of money,” Salcman told the board. “On the other hand, as other people have said, and I think rightly so, everything keeps getting more expensive. It isn’t the case that that amount of money per student would actually put us significantly higher than other school districts when you look across the country. So it’s not like we would be significant outliers in that regard.”

Salcman said that a change in the parcel tax’s seven-year renewal to a shorter number of years might give voters more opportunities to evaluate property and enrollment changes.

“Should we consider the possibility — given some uncertainty around new housing development, the number of students that might yield … — to give voters an opportunity, not in seven years, but maybe some smaller number of years in the future, to reassess whether the parcel tax is still an important thing to have?” Salcman said. “It seems to me that at this point and for the immediate future, the answer is definitely yes.”

Superintendent Don Austin said that shortening the current parcel tax renewal timeline and potentially failing to secure voter approval could introduce financial uncertainty and destabilize the district’s current funding model.

“We’re going to be back at campaigning, potentially losing, which is something that I know we haven’t had to deal with here in a long time,” Austin said. “If you have one loss, you’ll see panic like this district has never seen, so anything less than our renewal that we were proposing should be done with caution.”

According to Segal, decreasing the renewal cycle would expend more district time and resources that could be spent on students.

“A shorter measure would mean more frequent election preparation, more of this legal review and polling and community outreach,” Segal said. “That is staff time and community resources diverted away from instruction. Every dollar an hour we can keep focused on student matters.”

The Board voted unanimously to pass the parcel tax in 2020. According to Board Vice President Shounak Dharap, he would still support this decision, given similar circumstances.

“It was sort of a no-brainer for the board,” Dharap said. “All five of us, including Mr. Collins, unanimously supported the parcel tax. … I don’t think anything has changed since 2020 in the sense that our counsel also believes, as clearly our residents do, that the educational quality of our schools is paramount. So I support it.”

Board member Rowena Chiu said that while future trends are uncertain, the broader impact of enrollment and economic changes is much more gradual.

According to Chiu, under the parcel tax’s current seven-year renewal system, the district will have sufficient time to monitor and adapt to these larger trends.

“Whilst none of us know what enrollment figures might look like in seven years’ time, the impact of changing enrollment figures, demographics generally and broader economic trends will take some time to have an impact on both the school district budget and the wider economics of the city more generally,” Chiu said. “I think we’ll have time to react if some of these demographic changes do take place.”

Salcman said while he understands the reasoning behind a shorter renewal, the discussion has led him to reconsider.

“I’m only one of five, and it sounds like everybody else is in favor of going with the seven-year term anyway,” Salcman said. “I’m leaning in that direction also.”

After seeing 72% of participants in a poll supported the parcel tax renewal, community member Chris Colohan told the board that he supported renewing the measure.

“The survey shows that clearly our community really, really prioritizes education and is really, really supportive of supporting education,” Colohan said. “And so it just makes sense for us to trust our community when they tell us this is what they want, and we should go along with that.”