SALT LAKE CITY — A controversial proposal to redistribute property taxes collected by local school districts narrowly cleared the Senate on Monday after divisive debate.
SB81 has been described by opponents as a "Robin Hood" bill — in which local revenue is taken from affluent areas to address the inequities in cash-strapped school districts — and has been criticized as a heavy-handed intrusion by the state into the affairs of local school districts and communities.
"This just is really not fair. It's blatantly unfair," said Sen. Pat Jones, D-Holladay. "It is true that legislators set the boundaries, but within those boundaries, voters chose to raise taxes."
The bill's sponsor, Sen. Aaron Osmond, R-South Jordan, maintains the bill is a necessary first step to address the inequity created by Utah's arbitrary school district boundaries, which were set by past legislatures and created winners and losers throughout the state.
Osmond acknowledged that property tax rates are set by local communities but added that the districts that struggle the most to fund basic educational opportunities for students are often those where residents shoulder the highest tax burdens.
SB81 would raise the minimum basic rate — a revenue formula used to address inequity by siphoning property taxes from more affluent areas through the weighted pupil unit — resulting in more funds being redistributed.
The bill would not result in tax increases, Osmond said, but school districts that benefit from the increased redistribution would be required to offset those funds initially by lowering property tax rates. From there, local school boards would be able to restore their local tax revenues through the standard truth-in-taxation process, which would result in those districts seeing a net gain in revenue.
Districts negatively impacted by the bill, however, would require some form of new revenue to maintain current funding levels, which then could lead to property tax increases.
"It was the Legislature that enabled this environment," Osmond said. "This is about understanding that the tax burden is not equal."
Sen. Howard Stephenson, R-Draper, agreed with Osmond that the inequities in education funding is a concern of lawmakers' own making and one worthy of attention.
"The Legislature through its inaction has created a huge disparity between the tax base per students in some districts and those in other districts," Stephenson said. "This is a small, big step solution and ought to be passed."
In addition to serving in the Utah Legislature, Stephenson is also the president of the Utah Taxpayers Association, an advocacy organization that traditionally opposes initiatives that would lead to or encourage greater taxation.
But not all of Osmond's and Stephenson's Republican colleagues agreed. Sen. Lyle Hillyard, R-Logan, said that even though the school districts he represents would likely benefit financially from the bill, he was inclined to oppose it.
Hillyard said property taxes are decided with the support of local voters and play a role in where Utahns choose to purchase homes. The state moving that money to other areas of the state, he said, interfered with local control and could potentially create conflict with the decisions residents had made.
"I think when we here in our wisdom in the Legislature want to start changing the rules of the game, we need to be careful that we don't hurt people," Hillyard said.
The bill was ultimately advanced in a 16-12 vote. It will now go before the House for debate and consideration.
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