H.B. XXAmendments to Education Financing

Representative Merlynn Newbold

2 Equalization Issues

• Salt Lake County– Caused by the Creation of the New School District

– Capital Outlay Funding

• Property Tax Equalization– Amendments to Education Financing

• Representative Merlynn Newbold

– Operations Funding

– Statewide

20 Districts

Budget Taxes

21 Districts

Budget Taxes

Budget

Charters

-$2,918,600$1,956,400 $962,200

Bottom Line

20 Districts

Budget Taxes

21 Districts

Budget Taxes

Budget

Charters

Davis

Nebo

Jordan

Alpine

Weber

Cache

Tooele

Granite

Box Elder

So. Sanpete

San Juan

Sevier

Ogden

No. Sanpete

Tintic

Piute

Duchesne

Wayne

Juab

Garfield

Park City

Salt Lake

Canyons

Washington

Wasatch

Murray

So. Summit

Kane

Iron

Carbon

Millard

Emery

No. Summit

Grand

Uintah

Rich

Provo

Logan

Morgan

Daggett

Beaver

$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00

-$220.00 -$170.00 -$120.00 -$70.00 -$20.00 $30.00

Park CityRich

So. SummitKane

No. SummitDaggett

WasatchGrand

Salt LakeEmery

MillardCarbonMurray

CanyonsIron

WashingtonUintahBeaver

MorganLoganProvoDavisNebo

JordanAlpineWeberCache

TooeleGranite

Box ElderSo. Sanpete

San JuanSevierOgden

No. SanpeteTinticPiute

DuchesneWayne

JuabGarfield

Charter Schools

Net Per Pupil Impact

20 districts have no budget impact (taxes are reduced)

-$177.81-$82.37

-$61.47-$57.69-$54.92-$52.69

-$38.63-$31.20-$27.43-$27.14-$23.84

-$19.14-$14.78

-$9.71-$8.15-$7.24-$5.85-$3.98-$3.39-$2.86-$1.84

$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00

-$220.00 -$170.00 -$120.00 -$70.00 -$20.00 $30.00

Park CityRich

So. SummitKane

No. SummitDaggett

WasatchGrand

Salt LakeEmery

MillardCarbonMurray

CanyonsIron

WashingtonUintahBeaver

MorganLoganProvoDavisNebo

JordanAlpineWeberCache

TooeleGranite

Box ElderSo. Sanpete

San JuanSevierOgden

No. SanpeteTinticPiute

DuchesneWayne

JuabGarfield

Charter Schools

Net Per Pupil Impact

20 districts have no budget impact (taxes are reduced)

21 districts have budget cuts or tax increases

-$177.81-$82.37

-$61.47-$57.69-$54.92-$52.69

-$38.63-$31.20-$27.43-$27.14-$23.84

-$19.14-$14.78

-$9.71-$8.15-$7.24-$5.85-$3.98-$3.39-$2.86-$1.84

$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00

$27.00

-$220.00 -$170.00 -$120.00 -$70.00 -$20.00 $30.00

Park CityRich

So. SummitKane

No. SummitDaggett

WasatchGrand

Salt LakeEmery

MillardCarbonMurray

CanyonsIron

WashingtonUintahBeaver

MorganLoganProvoDavisNebo

JordanAlpineWeberCache

TooeleGranite

Box ElderSo. Sanpete

San JuanSevierOgden

No. SanpeteTinticPiute

DuchesneWayne

JuabGarfield

Charter Schools

Net Per Pupil Impact

20 districts have no budget impact (taxes are reduced)

21 districts have budget cuts or tax increases

Only charter schools benefit

Consolidates 7 Local Levies

Local Discretionary

LevyReading Levies

Special Transportation

Tort Liability

Board Leeway10% of Basic

Program (O&M)

Recreation Levy

Impact Aid

Basic Program CostBasic Program Cost

Local Levy

Basic Levy Revenue

Two Revenue Streams

This Bill . . .

Basic Levy Revenue

increases funding from the basic levy . . .

Basic Program CostBasic Program Cost

Local Levy

Basic Program CostBasic Program Cost

Local Levy

This Bill . . .

Basic Levy Revenue

increases funding from the basic levy . . . and decreases funding from the local levy.

Basic Program Cost

Local Levy

This Bill . . .

Basic Levy Revenue

increases funding from the basic levy . . . and decreases funding from the local levy.

Statewide, the increase and decrease offset each other.

Basic Levy Revenue

Basic Program CostBasic Program Cost

Local Levy

This Bill . . .

Basic levy revenue is distributed differently than local levy revenue.

Basic Program CostBasic Program Cost

Local Levy

This Bill . . .

Basic Levy Revenue

Basic levy revenue is distributed differently than local levy revenue.

Half the districts will receive more from the basic rate increase than they will lose from the drop in local levies.

Basic Program CostBasic Program Cost

Local Levy

This Bill . . .

Basic Levy Revenue

Basic levy revenue is distributed differently than local levy revenue.

Half the districts will receive more from the basic rate increase than they will lose from the drop in local levies.

The rest of the districts receive less from the basic rate increase than they lose from the local levy decrease.

• Districts that gain from the Basic Levy increase have to lower their local levy by the same amount – no net increase to their budget.

• Districts that lose from the Basic Levy increase have to cut their budgets or increase their local levy.

Why this Bill?

[This bill] “narrows the gap of our per student funding and our property owner effort in funding public education.” (Rep. Merlynn Newbold)

Why is it that “Park City gets to offer a lot better programs to their students than Alpine does, or at least spends more money than Alpine does?” (Senator Howard Stephenson)

Why this Bill?In other words, over half the school districts

either overspend or under tax. This over expenditure and under taxation causes

inequity among districts.

20 Districts

Budget Taxes

21 Districts

Budget Taxes

Budget

Charters

• Is there Inequity?

• Are Districts Over Funded?

• Are 21 Districts Under Taxed?

• Is this the Right Approach?

Using a combination of different statistical measures, Education Week ranks Utah as

the most equitably funded state in the nation (Hawaii is a single district state and was not

included in the comparison.) The measures include state and

local funding.

Is there Funding Inequity?

Are 21 Districts Overfunded?

• 21 District Average Per Pupil Expenditures– $7,164

• U.S. Average Per Pupil Expenditures– $9,154

• Park City Per Pupil Expenditures– $7,743

FY 2006 Actual – USOE, NCES

61 percent of Summit County’s residential property value is taxed at a

rate that is 45 percent greater than most residential property in the state.

Are We Under Taxed?

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

San JuanEmery

MillardSanpete

CacheSevier

CarbonTooeleWayne

UtahJuab

PiuteBox Elder

UintahDavis

BeaverDuchesne

WeberMorgan

StatewideGrand

IronWashington

GarfieldSalt LakeDaggett

WasatchRich

KaneSummit

$319

$763

$2,790

Property Taxes Per Capita

Summit Countyresidents pay more in

property taxes per capita than any other county in

the State.

Are We Under Taxed?

Are We Under Taxed?

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

EmeryCarbonMillard

San JuanUintah

DavisCacheSevier

DuchesneTooele

Box ElderWeber

PiuteUtah

Salt LakeSanpete

JuabWayne

MorganBeaverGrand

StatewideGarfield

WashingtonIron

SummitDaggett

KaneWasatch

Rich

1.50%

2.83%

4.62%

Property Taxes as % of Income

Summit County residents pay more in property taxes as a percent of

income than most counties in the State.

Are We Under Taxed?

Each year, Park City School District must give the State $2+ million from local

property tax revenues to help support other districts and charter schools.

Are We Under Taxed?

Other46%

PCSD's Income

Tax54%

Residents of Park City School District pay enough federal income tax to pay for over half of the federal funding in Utah’s K-12 schools.

Federal Funding in K-12 Education

In addition to its three districts, Summit County pays enough state income tax to

cover up to 18 other districts.

• Is there Inequity?

• Are Districts Over Funded?

• Are 21 Districts Under Taxed?

• Is this the Right Approach?

NO

NONO

Two Ways to Equalize

• Build up the lesser

Two Ways to Equalize

• Build up the lesser

• Reduce the greater

Two Ways to Equalize

• Build up the lesser

• Reduce the greater (level down)

House Bill XXEqualizes by leveling down – reducing some districts without building up the others.

An Example of “Leveling Down”

Two students stand back to back. The second student is taller than the first. In order to ensure that both are the same height, the philosophy of leveling down suggests that we cut off the feet of the taller student.

Why is it that “Park City gets to offera lot better programs to theirstudents than Alpine does, or at leastspends more money

(Senator Howard Stephenson)

than Alpinedoes?”

Why is it that Alpine doesn’t get toa lot better programs to theirstudents than Alpine does, or at leastspends more money than Alpine

?

offerlike Park Citydoes?

The End