howardnl by Howard Stephenson

Real Salt Lake has reportedly given up on a proposal to get Jordan School District, and to a lesser degree all 40 Utah school districts, to cough up money to help the team pay for their Sandy stadium infrastructure. That’s good news. Professional soccer should not be seeking money from Utah schools which already spend less per student than any state in the nation.

It appears that Sandy City will find another way of filling the gap with non-school taxpayer dollars. Earlier this year the Utah legislature enabled the soccer team to receive money from a Transient Room Tax on hotel rooms. When the Salt Lake County Council appeared to reject the money going to a soccer stadium House Speaker Greg Curtis threatened to push legislation which would give the TRT money to commuter rail.  Sandy and Salt Lake officials quickly got their heads together to sell the county council on using the TRT for both the stadium and a theater district in downtown Salt Lake. Curtis’s threat worked.

To make the stadium deal work, Sandy City officials have been asking Jordan School District to fork over $9 million in tax increment funds to subsidize Real’s soccer stadium. They cited Frisco ( Texas) Independent School District’s deal with FC Dallas as an example of what Jordan should do. But Sandy officials didn’t seem to realize that Utah is not Texas. Here are some facts to consider which show significant differences between Texas and Utah schools and taxes.

Per Student Spending

According to the Census Bureau’s annual Public Education Finances, the two school districts spent the following per student in FY2004 (excludes capital, debt service, non K-12 programs): Frisco ISD $6,986 (1.7% less than the Texas average of $7,104) Jordan SD $4,543 (9.3% less than the Utah average of $5,008) In other words, Frisco spent 54% more per student in FY2004 than Jordan did. Clearly, compared to Jordan, Frisco has some money to burn on frivolous projects.

Tax Burdens

Texas has one of the lowest state and local tax burdens in the nation. Unfortunately, Utah can’t say the same. Proponents of the deal are already making some spurious claims. For example, proponents are claiming that Jordan School District wouldn’t really be losing $9 million because this development would not occur without the subsidy. If this argument sounds familiar, it should because it’s the same false argument cities have been using for years to justify subsidies for retail, and it’s false for the same reason. Nearly all of the economic activity that would occur at the stadium and the surrounding retail outlets and restaurants is economic activity that will occur on its own in some form or fashion somewhere in the local economy. Subsidizing locally patronized entertainment and retail venues is not economic development because these types of businesses will come to Salt Lake County and Utah on their own without incentives or subsidies. If local residents have disposable income, retail and entertainment venues will come on their own without subsidy.

Besides, if Jordan falls for the so-called “economic growth” argument, would Jordan then give property tax breaks to all new business? If so, who would pay for the costs associated with growth?

What Jordan – and all other Utah school districts – really need is the creation of high paying jobs, the kind of jobs that are found in IT, biotech, pharmaceuticals, natural resources, and manufacturing.

In addition to bringing money into the state, these industries pay higher than average salaries, which means more funding for schools since schools receive about 68% of their operations funding and about 55% of their total funding from state income tax.

By the way, how does Texas spend more per student while having much lower state and local tax burdens? Not having a state income tax obviously helps (although Texas has high property taxes). Texas exports 2.2 times more per capita than Utah does. Export industries bring money into the state which expands the sales and property tax base.