School District won't hike taxes
Decision spares smaller taxpayers from making up for large corporate tax cuts
Following a public hearing, the Carbon County School District decided unanimously Wednesday to deny a one year property tax judgment levy which was being considered to offset a potential decrease in the district's general reserve fund.
District officials were forced to move back into last year's funding cycle when the Union Pacific Railroad (UP) was awarded a property tax adjustment. The UP had challenged the state's valuation of their holdings going all the way back to 2007. When they won their tax appeal, the Carbon School District was faced with a $256,000 bill. As those funds had already been budgeted and spent, the district will be paying the UP out of what is basically its savings account.
According to Carbon District Finance Director Darrin Lancaster, judgment levies such as the action being considered by the district on August 13 are set up to last for one year only, allowing institutions to recoup shortfalls without instituting permanent tax increases. Lancaster explained that the levy under consideration would have meant a $9 increase to home owners with property valued at $120,000 and a $17 increase to business owners with companies worth $125,000.
The district is expecting an increase in state revenue in the coming year of around $300,000, according Lancaster, who addressed the board as they opened the public hearing. No new federal dollars are expected but no money is scheduled to be taken either. In terms of cost, the district will see an approximately $800,000 increase in health insurance and retirement costs.
"To meet those costs without increasing what employees are paying for those coverages, we are providing forshortfalls by cutting staff, both administratively and in the custodial area," said Lancaster.
The district is now employing one full time and two part time custodians at their schools instead of the two full time employees which used to clean the schools.
Additionally, the district has chosen not to replace several administrative positions after those who filled them retired last year. Elementary Supervisor Joan Atwood's position will remain empty as well as the slot filled by Buildings and Grounds Supervisor Deon Kone. Technology Supervisor Scott MacKnight was replaced by Phil Feichko but a lower level technology position was cut, as everyone at the district moved up when MacKnight retired.
With these savings and the additional revenue to be seen from the state, the district offered their employees a 1 percent increase in salary over the past two years after not giving any increase for several consecutive years prior.
Last year, the district had to pay back several small tax valuation differences to Utah companies and decided not to issue a judgment levy and with funds being withdrawn from the district's coffers for the second straight year, Lancaster made clear his want to see the levy passed.
"The feeling that I have is that for the second straight year to have such a large refund of dollars when we began the year with a certain budget and have started spending," said Lancaster. "We are going to face a deficit at the end of the year that will cut into our fund balance even further."
He stated that the district would be facing a $260,000 deficit which would move the general balance to $350,000. To put that number in perspective, one month's payroll with benefits at the district is $1.3 million.
The Utah Tax Payers Association takes notice of any want to increase taxes across the state, calling various entities immediately to inquire as to just what they have done to mitigate any funding shortfalls before turning to increased taxes.
Lancaster reported that the association had called and inquired about administrative cuts and other cost saving measures before asking just how much they were being forced to refund to the Union Pacific.
"When they learned that we were being made to pay $260,000, they gave the levy their blessing," said Lancaster. "Based solely on the amount they understood the need for a judgment levy."
Following his presentation, the board expressed their nervousness at the fund balance which has fluctuated greatly since Lancaster started in 2006.
According to the finance director, when he began the balance hovered around $800,000. In the years since, it has grown to as large as $1.3 million. Should the district face the current proposed deficit, it will fall to an all time low during his tenure.
While the balance has gone down, new state money coupled with the information that the district would be paying off one of its two major bonds next year moved the board's discussion from their own coffers to the dangers of increasing taxes.
As the hearing moved into it's second hour with no motion made, the room grew quite. In a rare use of procedure, District President Wayne Woodward relinquished his gavel temporarily to Vice President Lee McCourt so he could enter a motion to deny the judgment levy.