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$5 MILLION BUDGET INCREASE SOUGHT TO EVEN OUT FUNDING

SHARE $5 MILLION BUDGET INCREASE SOUGHT TO EVEN OUT FUNDING

Gov. Mike Leavitt will be asked to add $5 million to his education budget to even out the bumps in local property tax contributions to the state's 40 school districts.

The Education Committee Wednesday directed its leadership to send a letter to Leavitt asking that $5 million be provided to help bring the poorest districts closer to par with the richest districts - with the understanding that over the next few years the costs could total more than $20 million.The committee also adopted a fall-back position. If the governor chooses not to include the request in his proposed budget, the committee will sponsor a bill and try to persuade appropriations committees during the 1995 legislative session to support the equalization effort, said Sen. Howard Stephenson, R-Draper, who made the motion.

More equity is necessary because the gap between rich and poor districts is increasing, state school officials told the committee. The amount of money that can be raised on a tax rate of .0002 ranges from $90.04 per student in Millard District to $7.56 per student in South Sanpete District. The inequities result from differences in assessed valuation among the districts.

Funding disparities have led to lawsuits in more than 20 states, and the courts often sympathize with school districts that can't provide the same level of funding as richer districts, said Jim Wilson, legislative analyst who serves the committee.

"We probably would lose a suit," he said, based on the current level of inequity among Utah's districts. Some committee members disagreed because property taxes constitute only a third of the total education funding in Utah overall. Income taxes, which fund the other two-thirds, already are equalized, doled out to the districts on a per-student basis, they said.

The proposed $5 million would be the funding in a bill sponsored by Rep. Kurt Oscarson, D-Sandy. The measure would both increase the amount of local money the state would "guarantee" and raise the amount of the subsidy.

"If we are going to have equity, we have to infuse state dollars," said Jay Jeffery, director of school finance in the State Office of Education.

Stephenson suggested there might be another way to create equity - by equalizing the property tax revenue generated by businesses and industries that are assessed by the state.

He admitted that such a move would be tough politically, since some rich districts would lose significant revenue to their poorer peers, but "we should be willing to take the heat for suggesting equalization of property taxes, instead of this Band-Aid approach."

He said spreading property tax revenues equally among the districts would compare with the equalization of income taxes that was accomplished years ago. This method of dividing income tax revenue equally among the districts, based on student numbers, has made Utah a model of school funding equity, he said.

The committee did not leap on Stephenson's suggestion, and he reverted to the proposal to use state money to partially even out the property tax inequities.

Rep. Kevin Garn, R-Layton, co-chairman of the subcommittee that approves the education budget, reminded fellow Education Committee members that the proposed $5 million for equalization will have to compete with other education needs, such as class-size reduction, teacher inservice and technology.