PRESS RELEASE
February 1, 2008

Contacts: 
Stephen Kroes, President
(801) 355-1400, ext. 5
(801) 573-8824 (mobile)

David Newell, Research Analyst
(801) 355-1400, ext. 6

FINANCING UTAH SCHOOL FACILITIES: REFORM IDEAS

Utah Foundation today released its January research report examining funding for Utah’s public school facilities, as well as proposals to equalize funding. The report, entitled “Equalizing School Building Funds,” is attached to this release and is also available at www.utahfoundation.org. An executive summary is also attached and available on the website.

The report examines Utah’s current school facilities financing situation, focusing on equity and adequacy of facilities funding across Utah’s 40 school districts. It also evaluates a number of reform concepts for how they would impact adequacy of school facilities and equity for students and taxpayers. Finally, it provides a model, showing how eight potential funding reforms would impact each district in the state, compared to the current funding system.

The foundation found that large increases in student enrollment statewide, increased school construction costs, and school district splits currently threaten the ability of some districts to finance school facility projects. Furthermore, the report shows that districts with higher property wealth have up to seven times higher facilities funding per student than lower-wealth districts, while districts with lower property wealth have property tax rates up to five times higher than wealthier districts.

Utah Foundation found that policies designed to cope with these problems should address four key objectives:

1. Ensure that growing districts have adequate funds to build new schools to house additional students.
2. Ameliorate the negative effects of splits on newly-formed districts that lose substantial resources.
3. Ensure adequate funding for renovations or rebuilds and maintenance across districts as well as for new facilities.
4. Ease the burdens on taxpayers in lower taxable-value districts so that their property tax rates are more equivalent to other districts with higher taxable values.

The report analyzes the potential effectiveness of various methods the state can use to aid districts in financing facilities. These methods include direct debt subsidies, funds for specific projects, and ongoing funds that boost lower-wealth districts’ tax yields for facilities. Referring to these methods, Utah Foundation research analyst David Newell said, “State aid in the form of supplementing ongoing district tax revenues would be the most effective method for promoting equitable and adequate facilities for students, assuming sufficient funds are provided.”

In regards to how the state might deal with the problem of school facility funding, Utah Foundation president Stephen Kroes said, “While there are problems with the current state funding system, appropriating enough funds to the state’s Capital Outlay Foundation and Enrollment Growth Programs could go a long way toward resolving the issues of adequacy and equity in school facility funding as well as spreading tax burdens more fairly. However, funding for such an endeavor may be difficult as the slowing economy reduces state revenue growth.”

The report is freely available to the public on the web at www.utahfoundation.org.

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The mission of Utah Foundation is to promote a thriving economy, a well-prepared workforce, and a high quality of life for Utahns by performing thorough, well-supported research that helps policymakers, business and community leaders, and citizens better understand complex issues and providing practical, well-reasoned recommendations for policy change.