The Utah School Finance Task Force has developed a series of recommendations for changing the state's formulas for education financing, aimed primarily at making funding more equitable among the state's 40 districts.
Recommendations arising from the one-year study of education financing will be presented to the Legislature before the 1991 session. Changes will be considered in 16 funding categories.The study was considered necessary because it has been 16 years since the funding formulas were set. In the interim, the nature of the state's economy, demographics, social structure and educational philosophy have changed, allowing inequities to creep in, said Scott W. Bean, interim state superintendent of public instruction. He also has headed the finance study.
A spate of lawsuits around the country, each involving questions of equitable and adequate funding for education, has also been impetus for the Utah study. Litigation is either under way or planned in 12 states. The suits are challenging both the adequacy of educational funding and the equitable distribution of money.
"Utah has had a good track record for equitable distribution of funds, but over time, some real disparities have crept in," Bean said. The state divides its income tax revenues equally on a weighted per-pupil basis, but the local contributions to education have become unbalanced, he said.
"The variation in local revenues is large, but not as great as the variation in property wealth," he said. In 1990, the assessed valuation per student ranged from $818,648 in South Summit District to $54,883 in Cache District.
The recommendation likely to have the most effect - and to be the most controversial - would equalize capital outlay/debt-service money. The proposal could call for property tax increases in some school districts. It also could create a "Robin Hood" effect, with some of the state's rich districts, in effect, subsidizing capital-outlay budgets in less affluent districts, said Bean.
The proposal concerning capital-outlay income, which comprises approximately 25 percent of school financing in most Utah districts, would mandate imposition of 5 mills of property tax in every school district, plus an additional half mill every year over the next 10 years to a cap of 10 mills.
Under the recommendation, income from all district property tax levies would be pooled and distributed to the districts on the same per-pupil formula used to divide the state income tax revenues, which are the main source of financing for education.
The ability of districts to raise money by levying property tax mills varies greatly, depending on the value of property within the district. Over time, that factor has allowed some districts to raise much more money for capital-outlay budgets than others. The spread between highs and lows in per-child educational spending has consistently grown greater.
That plan would create "winners and losers" as money from wealthy districts was divided with poor districts, Bean said. At present, there also are winners and losers, but the inequity is related to the districts' ability to raise money through property taxes. The equalization of the property tax income would offset existing inequities, Bean said.
The proposed redistribution would benefit 23 school districts and reduce property tax shares in 17.
Two distinct points of view among the state's school districts have been demonstrated in letters to the State Office of Education, he said.
"One poor district has threatened a lawsuit if it doesn't get equal financing for education. The other, a more wealthy district, has threatened a lawsuit if money raised by local taxes is shared with other districts," Bean said.
Given those extremes, Bean said, there will likely be a battle to implement the recommended changes in the capital-outlay tax mandate. Hearings will be held throughout the state in late July and August on the proposals. A new funding formula for special education, an area in which Utah has been challenged by the Office of Civil Rights, is still being developed, Bean said.
Where money would go
Under a proposal to equalize the capital outlay/debt-service money raised through local property taxes, some school districts would be "winners," some "losers." The proposed annual increase or decrease, based on 1988 figures:
Alpine ($4,729,698); Beaver ($45,636); Box Elder ($146,290); Cache ($1,462,222); Davis ($5,505,309); Garfield ($70,628); Granite ($4,023,653); Iron ($135,350); Jordan ($4,907,037); Kane ($72,698); Logan ($230,971); Morgan ($113,330); Nebo ($1,607,962); North Sanpete ($221,545); Ogden ($6,483); Piute ($73,879); Provo ($515,840); Sevier ($362,422); South Sanpete ($366,969); Tintic ($64,218); Tooele ($568,173); Wasatch ($98,829); Washington ($684,456); Wayne ($84,461); Weber ($1,867,221).
Carbon ($44,564); Daggett ($158,277); Duchesne ($739,754); Emery ($2,206,458); Grand ($158,689); Juab ($23,477); Millard ($2,620,418); Murray ($472,011); North Summit ($146,998); Park City ($1,256,998); Rich ($153,888); Salt Lake ($5,974,915); San Juan ($454,174); South Summit ($1,901,626); Uintah ($1,653,005).