Equalization bill would send local taxes to other school districts
February 24, 2015
A bill that would raise property taxes to generate $75 million annually in new revenue for the state’s poorer school districts has passed through the state Senate and is waiting on a vote by the Utah House of Representatives.
The bill has drawn the ire of local school officials who say Summit County residents would pay disproportionally more taxes while their students would reap little of the reward.
According to the fiscal note for S.B. 97, introduced by Sen. Aaron Osmond, R-South Jordan, the bill would increase property tax liability by $48 in 2016 for a $250,000 home and $348 for a $1 million business property. The $75 million in revenue those taxes would create would then be equalized among the state’s school districts, with districts with lower property values seeing the biggest benefit. Twenty-seven of the state’s 41 districts would see money from the bill, ranging from $26,000 to nearly $18 million.
The bill’s first draft specified that it was going to raise $15 million its first year, then increase incrementally until hitting $75 million. Moe Hickey, a member of the Park City Board of Education and its legislative liaison, said now that the bill is slated raise the full amount in 2016, Park City residents would immediately be hit with $4 million in property tax increases — money that would then be sent to other districts.
"There’s going to be more winners than losers on this bill, and Park City is certainly going to be one of the big losers," he said, adding that Park City residents already pay an outsize proportion of the state’s education budget due to higher-than-average income and sales taxes.
Hickey said he would have no problem with an equalization bill that would fund districts that don’t have the tax base to adequately support themselves. But with S.B. 97, districts that have simply neglected to properly tax their own residents for funding would also benefit, he said.
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"There are districts that have real socioeconomic problems and also have a low tax base," Hickey said. "They’re taxing themselves fairly high on a percentage basis because they don’t have the tax base to work from. But we have a lot of other districts that are taking money from equalization and not taxing themselves at the local level. That needs to be addressed, and this bill doesn’t do it."
Multiple messages left with Osmond’s legislative coordinator seeking comment for this article were not returned.
Jerre Holmes, superintendent of the North Summit School District, said that his district would also be unlikely to benefit from the bill.
"I don’t think it would hurt us like it would Park City, but I kind of doubt we would see money back," said Holmes, who serves on a joint legislative education committee that supports the bill. "We haven’t put the numbers to it for our specific district, but we do fairly well with capital revenues — better than a lot of other districts. So my guess is that, through all this equalization, we could come out a little behind the curve on it."
Shad Sorensen, superintendent of the South Summit School District, declined to comment on the bill until his district ran the numbers to see the effect the bill would have.
Making the bill worse, Hickey said, is the fact $75 million won’t stretch far. Utah ranks last in the nation in per-pupil spending, and the revenue created by S.B. 97 would be little more than a drop in the bucket.
Essentially, not only would local students not profit from the increased tax burden Park City residents would shoulder, students statewide would see limited benefit, Hickey said.
"It’s still just a Band-Aid," he said. "When you think about it, $75 million divided up isn’t that much. I don’t know whether they feel better because they can say they’re raising more money for education."
As of Monday, the bill had been sent to the House Revenue and Taxation Committee.
For more information on the bill, or to contact legislators, visit le.utah.gov.
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