Truth in Taxation Details

August 5th, 2022 /
Shauna Sprunger /
Business, News

The Provo City School District Board of Education, in an effort to be more transparent with our community, is providing the following information to explain the current increase in local taxes. There is an inherent tension between providing services and collecting taxes to fund them. Provo City School District has raised taxes for two reasons:

Building Shoreline Middle School and Rebuilding of Wasatch Elementary
Increasing wages to retain employees

Below is from the certified tax rate system. We are increasing our tax revenue by $12 million. $6.7 million is going towards building and Wasatch and Shoreline, with the remaining $5.3 million going to salaries. These amounts must legally go towards purposes for which they have been allocated.

From the Certified Tax Rate System

Auditor’s Certified Tax Rate	Auditor’s Certified Rate Revenue	Proposed Tax Rate	Budgeted Revenue
0.006073	$58,682,188	0.007323	$70,771,450

Source: Utah Property Tax Certified Tax Rate System

Our budget last year totaled $176.5 million. The increase of $12 million is a combined increase of 6.8% to our budget from the previous year.

So why is this different and everybody is reporting increases of 20 and 30%? That is because of all of our revenue that we receive, only a portion of it, which totals 36.0%, comes from our local property taxes. The state has set the funding mechanism for local school districts and this is why there is not a direct 1:1 correlation between the increase to our budget versus the increase to taxes. When we increase taxes, it only impacts one line in our revenue, the local revenue. That means the local tax payers carry the majority of the burden when we have to increase our budget beyond what the state or federal government gives us.

Combined Statement Of Revenues, Expenditures, And Changes In Fund Balances – All Funds

For the Year Ending June 30, 2023 (With Comparative Totals for Prior Years)

Revenues	Proposed 2022-23	Final Amended 2021-22	Total %	% Increase
Property Taxes	$ 75,787,562.00	$ 63,621,896.00	36.00%	18.90%
Interest From Investments	$ 531,197.00	$ 531,197.00
Other Local	$ 17,255,391.00	$ 10,180,745.00
School Foods Sales	$ 982,952.00	$ 67,952.00
State of Utah	$ 89,507,425.00	$ 79,625,132.00
Federal Government	$ 27,234,630.00	$ 22,461,045.00
Total Revenues	$ 211,299,156.00	$ 176,487,967.00		6.80%

The table below is taken out of the certified tax rate system and the amounts highlighted in gray are the only rates the board has the ability to change when it comes to the district’s funding. So while the total budget only increased 6.8%, the funding that the board is able to adjust is disproportionately affected because the district does not control where all of our buckets of money come from.

Budget Code	Budget Name	Auditor’s Certified Tax Rate	Auditor’s Certified Rate Revenue	Proposed Tax Rate	Budgeted Revenue
190	Basic School Levy	0.001652	$15,962,640	0.001652	$15,962,640
210	GO Bond Payments	0.001381	$13,345,199	0.001381	$13,345,199
230	Capital Local Levy	0.000964	$9,314,761	0.001847	$17,850,000
246	Voted Local Levy	0.000691	$6,676,867	0.000587	$5,676,000
510	Board Local Levy .002500	0.001289	$12,455,110	0.00176	$17,010,000
526	Charter School Levy	0.000096	$927,611	0.000096	$927,611
527	Grand Total	0.006073	$58,682,188	0.007323	$70,771,450
		0.004325		0.005575	28.90%

Building New Schools

The Wasatch and Shoreline facilities are currently underway. Those facilities are being replaced because they are 70 and 90 years old respectively and are in need of significant renovations and repairs. Those buildings also have unreinforced masonry (URM) which means they are not seismically safe and if there was an earthquake those buildings have the greatest likelihood of collapse. The URM report by FEMA (summary attached below) was released this last year. When compared to neighboring districts, Provo City School District is far ahead in replacing our facilities to meet the current standards. After replacing these two final buildings, no facility with children in it will have unreinforced masonry – making Provo one of the safest districts in the state.

We are happy these construction bonds were issued last year before the current increase and interest rates. This will save us $30 million over the next 20 years that would have been needed to cover the additional interest. This also means that over the next 30 years, Provo’s tax rate is likely to fall while other districts will have to increase their tax rate to bond and replace their aging facilities.

Building Comparison

Retaining Employees

As employees leave our district, we ask them why. It is commonly stated that in both our district and other districts, the employees are leaving the industry for better working conditions and pay.

Unfortunately, this has been occurring for a long time and has now reached its boiling point. Universities have seen declining enrollments in their education programs and the number of graduates in these programs is not meeting the demand.

This has created an urgent supply and demand issue, where a teacher’s working conditions, pay, and career outlook cannot keep up with the market in comparison to other careers. In addition, Provo City School District employees are making less, overall in career lifetime earnings, compared to our neighboring districts.

Teacher Salary Comparison

Salary Schedule – Bachelors

	Beginning Salary	Ending Salary	35 Yr. Career Earnings
Provo	45,500	76,950	2,142,875
Alpine	45,946	67,313	2,207,536
Nebo	47,074	71,410	2,197,807
Tooele	48,485	71,410	2,269,757
Logan	50,698	81,298	2,309,930
Ogden	49,475	79,225	2,436,000
Non Provo Average	48,336	74,131	2,284,206
without Alpine	48,933	75,836	2,303,374
Provo vs. Average	-2,836	2,819	-141,331
without Alpine	-3,433	1,114	-160,499

Salary Schedule – Masters

	Beginning Salary	Ending Salary	35 Yr. Career Earnings
Provo	50,125	81,575	2,304,750
Alpine	48,045	92,687	2,690,327
Nebo	51,306	83,049	2,457,038
Tooele	52,717	83,049	2,551,208
Logan	54,298	84,898	2,624,930
Ogden	53,850	83,600	2,589,125
Non Provo Average	52,043	85,457	2,582,526
without Alpine	53,043	83,649	2,555,575
Provo vs. Average	-1,918	-3,882	-277,776
without Alpine	-2,918	-2,074	-250,825

Salary Schedule – Ph.D

	Beginning Salary	Ending Salary	35 Yr. Career Earnings
Provo	53,825	85,275	2,434,250
Alpine	49,108	97,652	2,852,742
Nebo	56,950	88,693	2,654,552
Tooele	58,360	88,693	2,748,724
Logan	57,898	88,498	2,750,930
Ogden	57,350	87,100	2,711,625
Non Provo Average	55,933	90,127	2,743,715
without Alpine	57,640	88,246	2,716,458
Provo vs. Average	-2,108	-4,852	-309,465
without Alpine	-3,815	-2,971	-282,208

Consequently we have reached a critical point where we don’t have the necessary number of people who are interested in educating the children of our community. This shortage requires us to be competitive with our salaries.

Our support personnel are also seeing significant pressure from the private sector and people are walking away entirely from the job market. Most of our hourly positions started between $8 and $12 an hour. Our bus drivers start between $19 and $22 and require a CDL, they have to understand how to manage children, and be expert drivers to keep the children safe.

We also have a significant number of openings in our instructional aides, child nutrition, and custodial ranks. In transportation, we currently do not have enough drivers to start the school year. If we do not get these positions filled, it could cause a significant disruption in our ability to provide services to students.

We are taking steps to streamline services and be efficient. For example, we have increased the student to teacher ratio, which will save us about $2 million this year. We are changing our health insurance and will save $2-4 million per year by doing so. We’ve also generated about $2.5 million by reinvesting our construction bonds while the construction is taking place. But even with all of this, we need an increase just to be able to increase wages and try to stay competitive. This increase doesn’t make up all the ground in one year either. We worked out an agreement with our employees to do this over multiple years to try to lessen the burden on our taxpayers.

Utah has a process for individuals and families that currently do not meet certain income thresholds. If anyone does not meet those thresholds, they are encouraged to utilize this process to mitigate the tax bill. Utah has the homeowner tax credit. To learn more about it visit the Utah Tax page on the state website here.

The form is called the TC 90 and can be found at on the state website here. The other option is to use the tax deferral system that was passed into law this last year. To learn about all potential tax relief options, visit the state website here.

If you would like to provide feedback or comments, but cannot make it to the truth taxation hearing, please click here and complete this form.