From Deseret News archives:

School district split: some answers to questions

Published: Friday, Sept. 1, 2006 2:23 p.m. MDT
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The benefits for splitting school districts or keeping them large are debatable. But here are answers to some questions regarding a school district split:

Who gets a say whether a district splits? Voters in the cities or adjoining areas that want to create their own district.

Who would be the boss? Cities initiate the process, but new school districts will have their own school boards, which will have their own taxing powers like any other district.

Board elections would be clarified in a bill, being drafted now and expected to be carried by Sen. Carlene Walker, R-Sandy. As proposed, the school board would be elected the June following the public's November vote to secede. The district would become operational a year after the board is elected.

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Would a new district be able to bond? Borrowing money might not be immediately possible. The new district would not be able to receive a bond rating until it has a financial track record, said Carl Empey, vice president of public finance at Zions Bancorp and state financial adviser. Also, without a rating it probably can't participate in the state school bond guarantee program, where the state basically co-signs loans. Bond ratings are tied to interest rates and, thus, taxpayer burden when districts borrow money.

But Rep. David Cox, R-Lehi, who sponsored the current law, has talked about a proposal to put $70 million more into the state's building fund, an amount that would grow as state per-student funding does, so districts won't have to bond for so much. State director of school finance and statistics Larry Newton says $70 million is a fraction of what districts spend every year on buildings.

Would a remaining district's bond rating be affected? Probably, Empey says, because the split would change the existing district's assets, average median household income and other factors weighed in a bond rating.

What happens to my property taxes if I live in the new district? The question is difficult to answer, since outcomes would depend on the district, cities seceding, tax bases, student enrollment, old debt and other factors.

But in Jordan District, where a Sandy-Draper-Cottonwood Heights district has been examined, residents could be in a position to have taxes cut, or see improved programs or higher teacher pay. While overhead costs will rise, those cities have a relatively high assessed valuation and relatively few students to pay for, said Burke Jolley, Jordan District deputy superintendent overseeing business services.

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