Major District revenue source remains–to a point
Although there are many ways to cut the Park City School District budget to help gain long-term control of district finances, there are few ways to generate additional revenue that are not already in place, or have not been tapped. One exception is a state-mandated local option property tax known as the voted leeway. But school board members warn of negative consequences of maxing out the voted leeway that may outweigh the resulting budget boost.
Seventy-six percent of school district revenue comes from property taxes. While Park City property values have been rising like a hot-air balloon and would seemingly generate bountiful revenue for the district, state law dictates that as district property values climb, the tax rate must be adjusted downward, to keep residents’ property taxes similar to the year before. And that keeps school tax revenue similar to the year before, as rising expenses overtake income.
The voted leeway provides a way for the district and community to raise the tax rate above the level set by the state. And what makes additional revenue from the voted leeway attractive is that it can be used where needed in the District’s Maintenance and Operation budget, including everything from classroom supplies to salaries.
When a school district decides to take advantage of raising the state’s tax rate, it must hold a Truth in Taxation hearing in August. The public is encouraged to attend and give their input. "It’s a good process," Kim Carson, president of the Park City School District Board of Education said of the public involvement in the decision.
The current voted leeway tax rate for the Park City School District is .001650. The maximum tax rate allowed by the state is .002000. If the assessed value of district property climbs this year, the tax rate of .001650., would be lowered accordingly, to return the same amount of revenue to the district as in the previous year, giving the district more leeway to raise the tax rate before hitting the .002000 maximum.
"We’ve had two spectacular years of growth in assessed value, and that gives us a little more room," Carson said.
Last August, the board proposed a .000413 raise in the voted leeway, which would have increased taxes about $100 for a home assessed at $430,000. Carson said last year people attended speaking of their hardships of being on fixed incomes and of their concerns paying future tax bills.
"We’re not just responsible to students and the school district, but also to taxpayers," said Kim Carson, the president of the Park City School District board of education. "We definitely have a balancing act."
But even if the district wanted to raise the voted leeway year after year to keep pace with inflation, once the state-wide cap of .002000 is reached, it can be raised no more. "We can raise that with the voted leeway, but that has a cap on it," Carson said. "We only have so much capacity, so if we extend ourselves to that cap, we have hit the wall."
How much the district will propose to raise the voted leeway has yet to be determined.
Summit County will provide final revenue projections in June. "We will continue to get added revenue information from the state and county from now until June," said Carson. "The budget is in the development phase and will be for the next several months." Also in June, the district will submit its budget for the 2007-08 school year.
" the second board meeting in June, we will have figured what we would like the voted leeway to be set at," Carson said. The Truth in Taxation hearing will be announced and advertised in July, to take place in August.
"We’re looking at programs and funding five or 10 years down the road. "One concern of ours is sustainability," Carson said. "Our vision of what this district can be has not been diminished, but we have to take a step back and do some recalibrating."
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