On Tuesday, December 13th, 2022, the Legislative Auditor General presented to the Legislative Audit Committee An In-Depth Budget Review of the Salt Lake City School District. The comprehensive report outlined a number of issues with the economy and efficiency of the Salt Lake City School District (SLCSD), including millions of dollars in wasted taxpayers funds and proposed a few recommendations to address these issues. The Utah Taxpayers Association is most concerned with issues of wasteful government spending and those that unnecessarily burden taxpayers, namely the Salt Lake City School District’s failure to address declining enrollment rates. All data is taken from the auditors’ report.

 First, it should be acknowledged that the SLCSD has unique challenges not faced by similarly sized school districts. The SLCSD has a higher-than-average percentage of children who are English Language Learners, who require special education, or who qualify for free or reduced school lunches. These anomalies do influence costs since they require more programs to meet needs; however, even accounting for this, the SLCSD could and should immediately address these issues and improve operational efficiencies.  

Over the last 5 years, the SLCSD has seen some of the highest declines of enrollment in the state (13%). The demographics in Salt Lake City are different to the rest of the state, and there is reason to believe that both elementary and high school enrollment will continue to decline: Salt Lake City has high housing costs, the housing being built does not attract families, and many children in the area are now going to charter schools or other school districts. Enrollment decline was not surprising; in fact, it had been anticipated ahead of time, reported to the school board, and the school district had opportunities to address it. It was recommended that schools with low enrollment be closed. Instead, schools with low enrollment were left open at high cost to the taxpayer. The graph below shows the decline in capacity usage in elementary schools across the SLCSD between 2013 and 2022. Some schools already had low enrollment in 2013, and it has declined further.

Keeping schools open at low capacity has costs associated. The open schools continue to incur fixed utility and administrative staff costs, meaning the per-student cost at these schools increased. The graph below shows the per-student cost in the SLCSD and in comparable districts. Costs have always been higher in SLCSD and have continued to rise. SLCSD’s high costs are partly explained by operating schools at low capacity.

These rising costs should have been addressed by closing schools with low enrollment. Instead, the SLCSD chose to raise taxes. Since state funding for schools is directly tied to enrollment and enrollment in the SLCSD has been declining, state funding has been too. SLCSD is less reliant on state funding than other school districts given its large property tax base (27% of its funding is made up of state funding and around 63% is property tax funding), and this has meant that the funding deficit has been made up by increasing property taxes on SLCSD property owners. In August 2017, a $7.5m tax hike was imposed in the SLCSD; this was followed by a $1.5m tax hike this year. These are tax hikes that would have been entirely unnecessary had the school district acted on recommendations to close schools that were operating at low capacity. 

The report states:

“Operating schools inefficiently costs the Salt Lake City School District almost $3.6 million annually in administrative, utility, and food services costs. Two increases in property taxes possibly would have been unnecessary had the district adjusted its number of elementary schools in a timely manner and chosen not to rebuild elementary schools. The district may also experience added educational benefits as a result of school consolidation such as teacher collaboration and availability of programs.”

It costs between $553,000 and $835,000 each year to operate a single elementary school in the SLCSD. In the 2022 school year, the SLCSD used 57% of available space in their elementary schools. To reach 75% utilization across the district, the SLCSD would need to close six elementary schools, which would save around $3.58 million each year. Had these recommendations been implemented sooner, the recent tax hike would not have been necessary. The SLCSD’s failure to respond to declining enrollment rates has had a direct cost to SLCSD taxpayers and could have been avoided.

It is essential that governing bodies are held accountable for spending, especially when tax hikes are proposed. Taxing entities should fully implement reasonable recommendations to reduce spending before seeking additional revenue at the expense of the taxpayer. It is clear that the SLCSD took advantage of their large tax base to avoid making necessary cost-saving decisions which, while necessary, would have been unpopular. The SLCSD should not delay the permanent closure of low enrollment elementary schools across the district. The Utah Taxpayers Association’s annual School Spending report can help taxpayers understand how their school district is spending their taxes. The 2022 report will be published in January 2023.