Guest Editorial, September 26, 2009
September 26, 2009
I had the opportunity to serve as a school board member representing Park City taxpayers for four years. For the most part, it was during a period of unprecedented economic prosperity with flat student enrollment. Even with robust economic growth, the annual school district budget process was challenging.
Now our school board is faced with an economic maelstrom. The school district budgeting process is more difficult than ever because it is so tied to real property values within the district boundaries. Property owners are protesting their assessed valuations. Taxpayers have lost jobs and are struggling to make mortgage payments. Our taxpayer base is graying. Real-estate development is at a standstill.
At the same time, because of Utah education-funding law, taxes previously collected in and used within the Park City School District are now being recaptured by the state. In other words, certain school-related taxes paid by Park City taxpayers are transferred to the state to assist other school districts. Not only are our local taxes being recaptured, legislation is being discussed to equalize education funding, potentially costing our local taxpayers millions more to fund other districts. How’s that for taxation without representation?
The recent school board meeting where a hard decision was made regarding health benefits for district employees is only a foreshadowing of the misunderstood elephant in the room, the complete employee cost for the district. Besides salary and hourly compensation, the school district pays for a generous insurance plan and both a defined-benefit and defined-contribution pension plan, benefits that few in the private sector enjoy or will ever encounter. Since insurance and retirement are not perceived by many as take-home pay, there is a misconception about how much our education community is getting paid, or really costing the taxpayers.
Now for a big elephant in the room, the real cost of the defined-benefit pension plan for our educator employees. It is being funded by our tax dollars. In the past few months there have been several articles about how the Utah Retirement System is underfunded. In the coming years, taxpayers will be asked to shoulder the underfunded burden. This expense will create tension and confusion, as there are limited dollars available to be appropriated for education. A not insignificant amount of any increase in education funding will be used to fund retirement and not go directly into today’s classrooms.
Funding for education is vitally important, but spending the dollars wisely and fairly will be a balancing act delegated to our local school district and the State Legislature. I applaud our school board for their recent budgetary decisions and encourage them to continue to make decisions with the best interest of students always at the forefront.