by Howard Stephenson
A record number of school districts will be increasing property taxes this year due to the passage of SB230 sponsored by Sen. James Evans (R-Salt Lake) and strongly supported by Gov. Olene Walker and Democrat and Republican leadership in both houses of the legislature.
The measure was the Utah Education Association (UEA) teacher union’s big victory for the session, empowering public education to take more and more money from Utah taxpayers. Many legislators voted for the proposal because they didn’t want to incur the wrath of either Governor Walker or the UEA. Some legislators supported the measure but washed their hands of the tax increase, claiming they were not directly increasing taxes, they were only empowering local school boards to increase taxes. The measure passed the House 44 Yes, 27 No, 4 Absent and the Senate 24 Yes, 1 No, 4 Absent
SB230 is the Governor’s new $30 million K-3 reading program, which follows on the heels of former Governor Mike Leavitt’s policy of proposing each year a new program for fixing public education. Dubbed by some detractors as “This Year’s New Thing,” (TYNT) the new programs have been seen as an effort to take the public focus away from real reform, including market-driven education such as tuition tax credits.
TYNTs over the past twelve years have included the Utah Strategic Plan for Education, Centennial Schools, 21st Century Schools, Math & Science Initiative, Technology Initiative, Class Size Reduction Initiative, Site Based Management, Textbook Initiative, Competency Based Education, Seamless Education and the list goes on. Although TYNTs have not produced measurable improvements in education, they have succeeded in distracting legislators who are told they need to give the new program time to work before climbing on the school choice bandwagon.
The money will be used in large part to hire reading “specialists,” implying that teachers in Kindergarten through third grade don’t know how to teach kids to read. However, some fear that the money will simply be lost in district budgets in the same way textbook money was recently squandered. An audit by the Legislative Auditor General shows that $23.7 million in textbook money which the legislature appropriated to completely satisfy a statewide textbook shortage only covered half of the shortage. The audit shows that the amounts spent by the districts on textbooks did not match the amount sent by the state to the districts. Some districts clearly chose to spend the money for purposes other than textbooks. I predict the same thing will happen with this reading money. Even if all of the money is actually spent for reading, it is questionable whether children will be reading measurably better as a result of the ongoing $30 million increase in spending.
Walker’s original reading plan called for the full $30 million to come from state funds, including taking even more money from highway budgets, but legislative leaders offered up property taxpayers as the sacrificial lamb to provide half of the $30 million instead.
In order to qualify for the state income tax match, local school districts must impose new property tax levies or use existing property tax revenues to match the state funds. On a statewide basis, forty six percent of the state funding will be allocated on a WPU basis, and another forty six percent will be allocated on the basis of the number of students receiving free and reduced price lunch (FRPL). The remaining eight percent will be allocated in equal amounts to all districts.
On a district-by-district basis, the distributions will vary from the statewide average. Alpine, for example, will receive 36% of its total state funding based on FRPL if both levies are imposed. Granite, on the other hand, will receive 56% of its state funding based on FRPL if both levies are imposed. School districts with high assessed valuations per student like Salt Lake and Park City will receive no state funding based on WPUs.
SB230 authorizes school districts to impose two new property tax levies: a 0.00005561 rate for the state WPU match and a 0.00006539 rate for the state FRPL match. Districts may implement one or both of these new levies, or neither levy if state matching funds are not wanted. If all districts impose both rates, total school district property taxes will increase 1.6%. Of course, many districts will be increasing existing levies this year in addition to these new levies. To impose the new levies, districts will have to conduct Truth-in-Taxation hearing, but a vote of the people will not be required.
Even before passage of SB230, school districts have been on a tax hike binge. Of Utah’s forty school districts, fourteen school districts increased property taxes in 2002, and twenty school districts increased property taxes in 2003. Six districts increased property taxes in both years. Twelve districts did not increase taxes in either year.
Total statewide property tax collections for all local governments, including school districts, counties, cities, and special service districts, have been increasing steadily for the past couple of years. Last year, statewide property tax revenues increased 5.0% bringing the total to nearly $1.7 billion. SB230 property tax increases alone will cause total statewide property taxes to increase by nearly 1% in 2004. School districts will most likely increase property taxes beyond the amounts stipulated by SB230 and counties, cities, and special service districts will add to this amount.