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Utah's poorest school districts are poised to benefit from a rare tax increase next year.
The Utah House and Senate on Wednesday both approved SB97, which would adjust a statewide property tax to capture $75 million for public education. It now goes to the governor.
Under the legislation, the average Utah family would pay an additional $46 each year and the average business would pay $185.
"It really just comes down to staying with inflation," said Hurricane Republican Rep. Brad Last, the bill's House sponsor.
Income tax funding for schools is distributed on an equitable per-student basis, Last said. But property tax revenue, which accounts for roughly 40 percent of all school funds, varies greatly from district to district.
Because of the disparity in property values statewide, Last said, school districts with low property values have to place a high tax burden on residents in order to generate funds while comparatively rich areas can generate large per-student sums with relatively low taxes.
The statewide property tax is intended to correct that disparity, Last said, but the tax rate automatically drops to remain revenue neutral as property values increase.
"What's happened over time is this rate has floated down so far that now we hardly equalize our property tax at all," Last said. "That's why we're losing so much of our purchasing power."
Revenue from the bill would result in each school district earning a minimum of $1,746 per student in property tax revenues, which is equal to the property tax levels guaranteed by the state to charter schools.
SB97 is a years-long passion project by South Jordan Republican Sen. Aaron Osmond, the bill's chief sponsor. But previous efforts have received pushback for taking a "Robin Hood" approach of forcing rich districts to pay poor districts.
This year's bill would hold wealthier school districts harmless by relying on new revenue to equalize funding.
Debate in the House was minimal on Wednesday, but Rep. Kay McIff, R-Richfield, acknowledged the time spent on the issue while expressing support for the bill. "Ideas ferment for years and then we talk about them and suddenly it becomes their time and we do it," McIff said.
SB97 also pitted the Utah Taxpayers Association against its president, Draper Republican Sen. Howard Stephenson, for whom funding equalization is a personal priority.
Stephenson was one of the bill's most vocal backers in the Senate, but the association that employs him released a statement opposing SB97.
"This is one of the largest tax increases the state of Utah has ever seen," said Billy Hesterman, vice president of the Utah Taxpayers Association. "Taxpayers should be offended by this action as they have already produced more than $700 million in revenue for the state government this year. Utahns would be better served by being allowed to keep their hard earned money to help grow the state's economy than having it taken from them by the government."