A sharply divided House Education Committee on Friday shot down this session's most substantive measure aimed at equalizing school funding, a perennial sore spot on Utah's legislative agenda.
HB129 would have locked a property tax levy that under current law goes down as property valuations increase. The resulting proceeds, projected to be as much as $9 million in 2012, would have been used to offset income tax revenue that currently is equitably shared among districts.
"We're going to freeze the basic rate at the amount it is now. This will bring in additional monies into education funds and improve equalization throughout the state," sponsor Merlynn T. Newbold, R-South Jordan, told the committee. The bill would not likely have resulted in a net increase in school funding.
Critics complained that the measure accomplished nothing to bolster education, but only moved money "from one bucket to another." Park City parents implored lawmakers to figure out how to enlarge the education bucket, rather than pry money out of rich school districts.
Under Utah's current school funding mechanism, reportedly one of the nation's most equitable, school funding comes from local property taxes, as well as income tax, which is distributed to districts on a per-pupil basis.
Property-tax revenue generated in a district stays in that district, unless it's Park City, which has the state's highest property valuations and raises more money that it requires. Parents from Park City were concerned the bill would siphon away even more local tax revenue, generated by voter-approved levies.
"Don't be big government interfering with local government," said one parent.
The Utah Association of Counties and the Park City Board of Realtors sent representatives to speak against the bill, while the Utah Taxpayers Association supported it. The Utah School Boards Association believed the bill should divert proceeds from the tax-levy freeze to districts that need it most instead of to all districts, said its representative Tim Leffel, business director at Murray School District.
HB129, which failed in committee, would have frozen the rate of a type of property tax paid statewide. Under current law, the rate goes down over time as property values increase. HB129 would have locked the rate, generating additional revenue for districts over time, which would free up some state income tax revenue that could then be distributed proportionally per student statewide.
