Tax-rate increase hearing: August 14, 2018

This Tuesday, August 14, at 6pm at the District Office (575 N. 100 E., American Fork) the Alpine School Board will hold a Truth in Taxation hearing.  This is where you, the taxpayer, can have an opportunity to be heard about a tax-rate increase for this year's budget.

The perspective of most everyone in education is that if the amount isn't all that big, then it shouldn't be an issue.  In fact, bond votes and tax increases are proclaimed, nationwide in school board conferences and publications, as evidence that taxpayers are "supportive of public education."  If you oppose a bond or any other sort of tax increase, you don't care about kids and certainly you don't want them educated.  (In fact, some of the conferences have "how to" courses on increasing funding in education.  There is no discussion about what to spend that money on.)  In fairness, for the most part, I think Alpine School District does a decent job with our funding and budgeting. And the intentions of everyone involved, I think, are good.

Here's what you need to know.  Feel free to skim the non-italicized parts for the main points.

1. Utah Law requires the amount of money the districts (or cities or counties) receive from year to year to remain the same, excluding growth. 

So, if we received $100M one year from all the property in ASD's boundaries, then we should receive $100M the next year from those same properties PLUS any additional property taxes from any new developments that came into being that next year.  

How this works: If the total amount of all the property in ASD increases in value, then the tax rate decreases automatically to generate the same amount going to the district.  If the total amount of all the property decreases in value, then the tax rate increases automatically. 

An example.  Numbers used are for explanation purposes but are not accurate.  The tax rate is much, much lower.  And the examples are, admittedly, very simplified.
Year 1: Total property value : $100M. Tax rate: 1%. Taxes generated: $100M x 1% =  $1M.
Year 2: Total property value: $90M. Tax rate:1.1%. Taxes generated (minus growth): $90M x 1.1% = $1M.
Year 3: Total property value: $110M. Tax rate: 0.9%. Taxes generated (minus growth): $110M x 0.9% = $1M.


Truth in Taxation: If in Year 3, the district would like to keep the tax rate at 1.1% or even increase it, so as to generate more than the $1M, then a Truth in Taxation hearing would need to occur.  At the 1.1% rate, this would generate $1.21M instead.  

Rather than following the economy like most other states, that when values increase, the taxes go up and vice versa, ours is the opposite. When the economy is struggling and values are down, the tax rate automatically increases and you are paying a larger percentage in property taxes than you were.  But there is no hearing on this.  It just happens.  When the economy is good, you pay a smaller percentage in taxes.

2. If the tax rate goes down, the district can hold a public Truth in Taxation hearing to increase that rate.  This is what we are doing on Tuesday.  The interesting part of this is that we only have these hearings, arguably, when the economy is strong.  When the economy is weak and values are down, the rate increases but without a public hearing.  So the vast majority of the population is less concerned about a rate increase because they are doing well.

Sadly, under our current tax system, the people who are most harmed by this are those whose particular circumstances make them struggle economically while prosperity reigns around them.  They might be those on a fixed-income (who, if elderly or disabled, do get partial waivers for property taxes), young people and young families, just starting off in life, and military families, for example.

3. The legislature has created an incentive for districts to increase property taxes. The state matches local property tax with state funds, up to a certain amount.  If the tax rate goes down, the state continues to match at the higher rate for up to 5 years.  This creates an incentive for the district to increase the rate at least once every 5 years.  The legislature may claim that they don't raise taxes, but they incentivize the local school districts to do it for them.  It's a win-win for the legislature.  More money in education; no accountability for raising taxes or creating a tax system where in hard times your tax rate just happens to go up without anyone commenting or caring.

Going forward, it would be even easier for the district to just regularly increase the rate every year, that way the increase is much, much smaller, and fewer people will complain.  Doing this yearly, the perception will be that we aren't increasing the taxes very much, and the side-benefit is that people get used to having a Truth in Taxation hearing every year. It becomes as big of a deal as watching paint dry.   

4. We support tax-incentives over multiple decades for big, well-connected companies, like Facebook.  Currently, those range in the area of $18,000,000 per year. (See pg. 181: here.)

Yes, the argument is that without these tax incentives, nothing would ever develop.  But, giving the tax incentives over more than 5 -10 years enters into the realm of predicting the future.  It is difficult for the average person to justify a tax incentive for a big, well-connected corporation, but then come back to taxpayers and ask for a few dollars more.  What's good for the goose should be good for the gander.  If we need more money today, then we probably shouldn't have approved those tax incentives all those years ago.  With a growing community like Utah County, I think we would be hard-pressed to assume that all the development in our communities wouldn't have occurred without these tax incentives.  In the short-term, that may be true.  In the long-term? I seriously doubt it.  Tax-incentives, if you think such a thing should be done, should be limited to 5 or 10 years.  Anything more than that is just robbing future generations of school kids in order to appease the power-brokers of today.  Facebook gets to live here tax-free for 35 years.  You and I aren't so lucky.

5. Increased Tech and Coaching Funding vs More Teachers and Smaller Class Sizes.  Our district/board's priorities don't seem to match those priorities of the people.  Repeatedly, when talking with parents and taxpayers, their biggest concerns are wanting smaller class sizes, traditional math (not Common Core/Investigations/Inquiry-based math), and limits on screen time.

Instead, partly due to legislative incentives and partly due to education conferences, everyone (it seems) in the state and the nation is accepting the narrative that without technology, kids will not be able to function appropriately "in the 21st Century."  So, in addition to the millions that ed tech companies stand to make, everyone thinks that educational technology is the Silver Bullet of education--probably a lot like Baby Einstein videos from a decade or so ago.  (Side note: Silicon Valley execs are the exception. ) Have you seen your kids on tech?  Are you worried they won't pick it up without explicit training and exposure to it?

Also, there is a huge push toward Social-Emotional Learning (SEL)/21st Century Skills, nationally, as opposed to academic content. What that means is participation and attitudes can be seen as more important than whether you know history or math facts.  To our credit, our teachers are being trained to make SEL as important, not more important, than academic content. But, while teachers have always, naturally, included things like participation, honesty, and a can-do attitude as a by-product of their teaching, to focus on those things necessarily removes the focus from reading, writing, and math.

Our current budget includes expenses for hiring more Technology and Instructional Coaches to train teachers to use tech and these other methods (Project-based, Inquiry-based, etc), as opposed to using those same funds to hire more teachers to reduce class sizes.  The argument is that if the Coaches make our existing teachers better, then it's a more efficient use of our time.  One school has had great success with an Instructional Coach.  So, if that model holds, then similar improvements should be seen when expanded across the district's nearly 90 schools. 

Our budget also includes funding for more technology.  As our schools go through our 21st Century implementation, iPads and ChromeBooks are included at the ratio of 1 device for every 2 students.  Sadly, parents don't really have an option for a tech-less school system. And in light of all the negative results of too much screen time, I think we are setting our kids up for lots of problems (sleep issues, moodiness, depression, etc.  See here, here, and here.) by adding to the already ubiquitous screen exposure.  Not to mention, the increased difficulty parents now have in making sure kids do their homework (and don't get distracted), limiting screen time, and knowing what their kids are studying and how they're doing, if everything is online.  

Many people think a small increase in funding is appropriate.  The real question is what do you think? How should that increase be used? Will you be willing to stand up and state what your priorities are for our school district?  Hope to see you at the hearing on Tuesday!