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Senate panel OKs property tax freeze to fund schools

First Published      Last Updated Feb 28 2017 10:02 pm

Education funding » Bill would allow property tax revenue to increase in line with rising property values.

Members of the Senate Education Committee approved a bill Tuesday that would boost school funding through a statewide property tax rate freeze.

Current law requires tax rates to remain revenue-neutral by adjusting down as property values increase.

But Sen. Howard Stephenson, R-Draper, an architect of and advocate for Utah's "Truth in Taxation" laws, said taxing entities are expected to raise rates and capture inflation every five to eight years. Except for a $75 million increase in 2015, he said, lawmakers had passively allowed Utah's statewide property tax rate to be cut in half over the last two decades.

"For bedroom communities in particular, that has reduced the yield from the property tax for the statewide education system," he said. "The buying power is reduced even though the costs of educating are increasing."

Stephenson's bill, SB255, would freeze the tax rate through 2022, allowing schools to capture the revenue generated by increases in property values. Based on current trends, the freeze would generate roughly $20 million in its first year and continue to grow until 2022.

Stephenson, president of the Utah Taxpayers Association, originally proposed capping the income tax revenue diverted to higher education from elementary, middle and high schools. But he agreed to substitute his bill after the income tax cap was coldly received by members of the Senate Education Committee.

His substitute earned the unanimous approval of the committee after a provision was eliminated that would have given the Utah Board of Education discretion over how the additional funding is spent.

"I personally support your bill, except I do not support that part," Sen. Lyle Hillyard, R-Logan, said. "I will vote for your bill if you have that provision taken out."

The bill will now advance to the full Senate for consideration.


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