Opinion
Letter to the Editor: ASD raising taxes again and it’s time to split
Utah’s Truth in Taxation (TNT) is a legal process that allows Utah’s taxpayers to have a say in the local government’s property tax rate increases. TNT was designed so that property tax rates will be automatically reduced with increased property valuations to bring in the same amount of property tax revenue. On August 8, 2023, ASD will hold a TNT hearing to raise property taxes by 19.19 percent. This will be the fourth time in the last five years that ASD has raised taxes. ASD has increasedtaxes by over 160 percent in 20 years, or an average of over 8 percent per year.
Why are ASD’s property taxes going up 19.19 percent? The truth is that its 2022 general obligation bond failed, and ASD almost immediately proceeded to authorize $90 million of lease revenue bonds. While lease revenue bonds are legal, theysubvert taxpayers’ will because their issuance doesn’t require voter approval; they carry higher interest rates, lacktransparency, and raise taxes. ASD’s financial statements claimthat ASD built every school promised under the 2016 Bond with funds from that bond. The truth is that ASD was 31% over budget on the 2016 bond, with two schools left to build and no money to pay for them. ASD quietly issued three lease revenue bonds totaling $77 million between 2018 and 2022 and now has$167 million in outstanding lease revenue bonds.
ASD is simply too big and has too many needs to address. ASD wants to consolidate east-side schools into larger schools, while east-side communities prefer to keep their smaller neighborhood schools. The west-side cities need to build new schools fast enough to satisfy their growth. The truth is that ASD has used east-side property taxes to subsidize west-side growth for the last 20 years while ignoring or exacerbating east-side problems(seismic issues, curriculum cuts, school closures). Another uncomfortable truth is that ASD has handed out RDAs to hand-selected companies, effectively giving these companies a free tax ride of $30.5 million annually—a burden that smaller businesses and residents alike are forced to shoulder instead.
In 2021, ASD compiled demographic and tax revenue data of financial conditions by municipality. ASD’s proposal was a three-district split: South Area (Lindon, Orem, Vineyard), Central Area (Alpine, Highland, Draper, American Fork, Cedar Hills, Pleasant Grove), and West Area (Lehi, Eagle Mountain, Saratoga Springs, Cedar Fort).
Their findings:
• South Area has 22.8% of the students and pays 30.72% of the taxes.
• Central Area has 29.8% of the students and pays 31.13% of the taxes.
• West Area has 47.41% of the students and pays 38.15% of the taxes.
• The biggest contributors (percent of taxes less percent of students) by city are Lindon (3.04%), Alpine (1.67%), and Orem (4.52%)
• The biggest deficits by city occur in Eagle Mountain (-7.02%) and Saratoga Springs (-4.57%)
• Given that property taxes are $291 million, each percent of property taxes represents about $3 million.
Annually, Eagle Mountain is subsidized by $20 million, while Lindon is subsidizing almost $9 million. On a property tax paid per student basis, Eagle Mountain pays $2,283 per student, while Lindon pays $6,550. Are Lindon students receiving the same benefits as students in Eagle Mountain? If you simply compared Blackridge and Lindon Elementary, you would know they are not (school age, seismic safety, curriculum). ASD has closed five schools in the last four years — four in Orem and one in Pleasant Grove. ASD tried closing three additional schools this year (Lehi, Lindon, Orem) but was thwarted as ASD didn’t follow state law regarding school closure notification. ASD is attempting to decrease operating costs and generate additional capital funds by closing east-side schools to fund the west-side growth.
Truth, ASD will collect $291 million in property taxes this year (Utah State Tax Commission) while its fund balances are decreasing by $79 million. That means they will still spend the money; they just won’t collect it this year. This is irresponsible, however likely done to appear to be fiscally responsible. If ASD collected in line with spending, taxes would actually increase byanother 27 percent, totaling a 46 percent increase in 2023. This deficit will need to be reimbursed, so expect higher tax increases in the future.
I believe education is neither equally, safely (seismically), nor financially meted out as responsibly as Alpine School Districtclaims.
Please split the district and let voters in the new districts decide what is best for their children. By telling the truth to taxpayers, the east-side city schools can receive the seismic and cosmetic upgrades needed (or for schools to remain open!) while the west-side cities can receive the schools they desperately need.
John Barrick, Ph.D. CPA
Orem, Utah
