According to a new Association report, rising property values have impacted tax rates across the state.
The annual School Spending Report, released in February, examines spending, revenues, and tax rates from all 41 school districts and combined charter school expenditures during the Fiscal Year 2021.
In its findings, the Association found that school district’s overall combined tax rates actually decreased from the prior year due to significant increases in property values. Utah’s lauded and unique Truth-in-Taxation law calculate property taxes differently than other taxes, such as income or sales tax.
Utah’s property tax rate is based on revenue, rather than a static rate. As property values increase, the rate floats down to ensure taxing entities, such as a school district, receive the same amount of revenue they did the prior year.
Because of unprecedented property value increases in multiple parts of the state, the overall combined tax rate decreased, with a statewide average rate of 0.005061. This rate does not include the statewide basic levy, which is levied by the state of Utah, rather than local school districts.
The rate the prior year was 0.005223, a decrease of 0.000162, which is equivalent to roughly $156 million.
Keep in mind, that $156 million does not disappear as the rate decreases. The school districts still keeps that revenue because the revenue must remain the same (with minor exceptions, such as for new growth).
While overall, the statewide average tax rate decreased, Utah’s districts also vary widely with the property tax rates (increments) they impose on their taxpayers. Some school districts, like Park City, levy 49% of the statewide average, while Morgan School District levies 153% above the statewide average.
However, Park City and several other districts benefit hugely from their property tax base. Park City, for example, has very high property tax values with many properties exempt from the primary residential exemption. Therefore, they generate much more revenue from higher-valued property. This allows them to have much lower tax rates than South Sanpete or Tooele, for example.
Additionally, Park City School District has an assessed valuation per student of $3,942,269. Compare that with South Sanpete at $256,385, which only has 2,938 fewer students than Park City.
The new report also finds that COVID-19 also changed funding for Utah’s school districts and other local education agencies (charter schools). In FY 2020, Utah’s LEAs received 7% of their total funding from federal sources.
In FY 2021, that figure grew to 10%, with the federal government providing $641 million to school districts and $66 million to charter schools.
The school lunch program received a large percentage of those federal funds, with the statewide school district average on program spending growing from $134 to $391.
In addition, the report finds that Utah’s district schools spent $10,398 per student, with 10 school districts spending less than the statewide district average. Six districts spent more than $20,000.
See how your school district fares, or visit utahtaxpayers.org.