From Deseret News archives:

School funding warning for Orem

Would split from Alpine result in underfunding?

Published: Wednesday, July 19, 2006 9:44 a.m. MDT
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OREM — Residents may be surprised by preliminary findings of a study on the feasibility of an Orem school district.

Orem residents do pay more than their share of taxes to the Alpine School District, a reason cited by many who want the city to split off and create its own district, educational consultant Mike Bennett said.

But the inequity is scheduled to end next year.

And Bennett said he discovered that if Orem residents forced a split, they might have less money to run a city school district than if they remained in the Alpine District. The reason? They legally will have to continue to help the Alpine School District pay off bond debt.

Bennett planned to present his completed feasibility study to the Orem City Council next week, but a scheduling conflict will postpone the presentation, possibly for one week.

Bennett said his numbers are preliminary and don't consider the possibility of neighboring cities also leaving Alpine to participate in an Orem district.

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Feasibility studies like this one include studying enrollment projections, finances in would-be districts and the financial effects on the district left behind. Bennett obtains data for his studies from county assessor and tax offices, school districts and the Utah State Office of Education.

Bennett said about 40 percent of the total taxes Orem property owners pay to the Alpine School District is used to pay off bonds issued for new buildings and other construction projects.

The actual amount can vary because home owners only pay 55 percent of their home's value in property taxes. Business owners pay 100 percent of the tax rate.

Property values in Orem next year will total more than $3 billion.

Property taxes on houses, land and businesses, obviously, are a percentage of that, but Bennett had not yet determined the dollar amount Orem property owners pay to the Alpine District each year.

A law approved by the Utah Legislature in the spring requires debts be divided when a district divides. And if Orem residents leave Alpine, some debt will follow them.

The amount Orem property owners will pay to the Alpine District may be so high that the new city district will be left with significantly less funds, Bennett said.

Orem students make up 29 percent of the Alpine District's 54,000 student population, said Bennett, a former teacher, principal and superintendent who has worked in small, medium and large districts.

Last year, property owners in Orem contributed 36 percent of the Alpine District's local tax base, which seems to support claims that people in Orem contribute more to education in the district than other cities. But that will change.

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