Quick Take
Santa Cruz schools don’t have to be dependent on federal funding, writes Kyle Kelley, the vice president of the Santa Cruz City Schools district board. We can take a simple action to get more money to our schools: build more housing. Here, he explains how local schools can benefit from increased property tax revenue: “When local property taxes bring in more money than what the state provides to schools directly, the schools get to keep the additional funds. That extra money – known as ‘basic aid’ – goes directly to our classrooms.”
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Let’s fully fund our schools. Our kids deserve smaller class sizes, teachers who get better pay and want to stay in our area and a learning environment where they can thrive.
It’s hard to imagine this happening now, as the federal government slashes education budgets and looks to dismantle the Department of Education. But, now is not a time to give up. It’s time to take action. We have a way to unlock millions in new school funding without waiting on Sacramento or Washington.
It starts with housing.
Here’s how it works: When new homes get built and sold, property tax revenue goes up. Once county property tax revenues hit a certain threshold, local schools get to keep more of that money. That means direct funding for classrooms with money we control right here in Santa Cruz.
Right now, most schools get state funding based on student attendance. When local property taxes bring in more money than what the state provides to schools directly, the schools get to keep the additional funds. That extra money – known as “basic aid” – goes directly to our classrooms.
Santa Cruz’s elementary district already qualified for this. That’s why we were able to roll out universal TK (transitional kindergarten), continue intervention supports and keep our schools stable while other districts struggle.
High schools from Santa Cruz to Soquel are close to crossing that line. When we do, we’ll be on par with districts like Los Gatos and Palo Alto, where local funding powers their programs.
How much do we need and how do we get there?
The $18 million threshold
We need $18 million more in property tax revenue to hit the magic spot. That might sound like a big number, but it’s absolutely within reach – if we build enough new housing.
New homes don’t just provide places to live. They generate new tax revenue, funding our schools without raising taxes on longtime homeowners. That’s because California’s tax system locks in property tax rates for existing owners, meaning most of the money schools get from property taxes comes from new development and property sales.
Take one of the newest apartment buildings downtown, Anton Pacific. It’s valued at $75 million and generates about $750,000 per year in property taxes. That money goes toward city services, county programs – and, yes – our schools.
To reach the $18 million threshold, we need a mix of new homes, apartment buildings and commercial developments. The good news? We’re already on our way. The Downtown Plan Expansion alone could bring 1,600 to 1,800 new homes, helping us close the gap while meeting our housing needs.
Why now? What happens when we get there?
Every year we wait, the threshold rises. The state recalculates school funding formulas annually, meaning the longer it takes to reach the threshold, the harder it becomes. The state’s target rises by nearly $1 million each year. If we don’t act now, we risk missing this opportunity.
When our schools reach that funding threshold, we lock in stable, locally controlled funding for the long term. That means:
- Competitive salaries to recruit and retain great teachers.
- Smaller class sizes to improve student learning.
- Stronger programs in science, technology, engineering, art, English and math.
It’s not just about hitting a number. We are giving our schools the resources they need to thrive.
Santa Cruz decides its future. If we want better-funded schools, we must support smart housing growth. Here’s how you can help:
- Speak up – support new housing projects in Santa Cruz. Tell city leaders that schools need this funding.
- Talk to neighbors – many people don’t realize how directly housing affects school funding. Spread the word.
- Contact your representatives – ask them to prioritize housing policies that benefit schools.
This is a rare opportunity. More housing means more school funding. We all get a stronger Santa Cruz.
Let’s make it happen.
Kyle Kelley is the vice president of the Santa Cruz City Schools Board, a Bay View Elementary and Mission Hill Middle School parent, and a relentless advocate for making Santa Cruz a place where families and schools can thrive.