Statewide equalization looms in legislature
Local officials say statewide equalization of property taxes intended for school construction and renovation could place an unfair burden on Summit County property owners.
A legislative capital-equalization committee has been meeting to discuss the possibility of raising property taxes statewide to pay for construction and renovation of schools within the highest pupil count. One issue continually raised by opponents is that the majority of the pooled funds could go to large districts that already have their infrastructure in place. Another argument against the proposal comes from Summit County residents who say they are already paying a disproportionate share of taxes to help fund other districts in the state. Regardless, statewide equalization will likely appear before the state legislature in January.
On Oct. 10, statewide equalization was discussed in a meeting between Park City education officials and Summit County representatives.
"The interest lies in finding capital funds for potential district splits," Patty Murphy, the business administrator of the Park City School District, said. "But conversely, if districts split, they are eligible for less funding (due to split districts with fewer students)."
Capital outlay money is used to build new schools and renovate and update older schools.
Murphy explained the initial proposals call for property tax earmarked for school capital projects to be pooled from around the state. A base amount of $11,000 would be given yearly to each school district and every charter school. The rest of the pooled monies would be distributed to districts based on enrollment.
"Enrollment is a good tool if you are funding text books," Murphy said. "It is not a good tool to fund school facilities. It is the growing districts that need the money, yet they’re not the districts receiving the money. And under this proposal, rural districts like Duchesne, would have their property taxes raised, to have their funds go to Salt Lake County. That doesn’t make sense.
"Large districts like Granite (in Salt Lake County), whose enrollment has been relatively flat, would get a lot a lot of the money even though it doesn’t need money to build new schools," Murphy said.
Murphy said information presented by the state equalization task force on Oct. 9 projected that Park City would pay an additional $9 million in property taxes and, of that the school district would get $42,000 of it back. Murphy said that would translate to $246 per year of additional property tax for the owner of a primary home valued at $500,000.
"I know this year there has been a bit of an outcry over property taxes," Murphy said. "In the last few years property values and taxes have increased so much that people have become concerned. There are a lot of families who purchased their home some time ago, and now they’re paying tax on a home that’s value is quite a bit higher and they’re struggling."
Park City superintendent Ray Timothy said, "One of the criticisms of (the people) up here in Summit County, and especially in Park City, is criticism that we don’t help other people with our tax base. That’s just not a true portrayal. At one capital-equalization committee meeting someone said money is literally falling out of our pockets up here and that we are extremely wealthy and we should be willing to help other districts.
"We are sharing. The three Summit County school districts (Park City, North Summit and South Summit) are contributing enough to fund the entire minimum school program for the 13 smallest districts in the state. I think we’re being very generous."
One alternative means of funding new school buildings and improvements is issuing bonds and paying them off over time. Murphy said not all districts have the resources to pay off bonds. "Districts could and have used bonds, but it’s like having a second mortgage," she said. "You only have so much ability to make principal and interest payments over the course of a year."
Rep. Mel Brown (R) Summit County said at the Park City meeting, "I remember when Park City was the poorest district in the state. When you start tinkering with the tax base, you create problems that never end. Property tax is so volatile. Businesses and second-home residents would be taxed 100 percent. It would be a disproportionate hit on this community. We’ve got people in south and western Salt Lake County and Utah County who are driven by the fact that someone else ought to be paying their bill," Brown said.
During the Park City meeting, Rep. Christine Johnson (D) who represents western Summit County and parts of Salt Lake, said, "I would like to see funding come from people using the services instead of asking everyone else to absorb the expense of the new construction. I would like to see them absorb some of the burden of this responsibility. I don’t see anything fair or balanced about this. It’s disproportionate in every way." She expressed concern about the direction of the equalization task force. "The task force is already trying to fine tune equalization ‘How do we make this work,’ rather than, (ask), "Is this the correct solution.’"
One possible alternative to statewide equalization discussed at the meeting was low-interest loans made by the state to bond holders.
Both Timothy and Murphy like the state formula currently in place.
Murphy said that the equalization task force will continue exploring the issue and put forth a recommendation for the legislative session that begins in January.
"It could take a lot of twists and turns before it even comes up for a vote," Murphy said. "We’ll just wait and see if there is any number of other proposals."
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