Pub. 5 2015-2016 Issue 2

13 district’s 25% match). USBA representatives had long criticized the “local replacement formula” (the “LRF,” the formula the Legislature created to provide charter schools with funding akin to school districts’ property taxes) on this point. Specifically, USBA felt the property tax notice should include a message noting that charter schools receive a portion of the property tax the local school districts impose. Without that notice, they felt, the public would hold the school district accountable for money they had no control over. The CFTF agreed with that critique, and directed legislative staff to draft a bill to place this information on the property tax notice. At its final meeting the CFTF voted against the staff’s draft bill, because the CFTF were not completely comfortable with the staff draft. Nevertheless, a strong majority of CFTF members wanted this transparency in some form. The CFTF spent almost all of its time evaluating what components should and should not make up the LRF. At its final meeting, they approved a draft of what became SB 38. As it emerged from the CFTF, SB 38 included several com- ponents. It included in the LRF state guarantees to the voted, board and capital outlay levies, and district expenditures on community recreation. It also moved charter funding from a two-year lag to a one-year lag. THE CFTF RECOMMENDATIONS, IN BRIEF The LRF attempts to provide a surrogate of the property tax revenue which school districts impose and receive, but which charter schools are incapable of collecting. Until SB 38, the LRF calculation excluded district expenditures on community recreation and state guarantees to the voted, board and capital outlay levies. In charter schools’ infancy, excluding community recre- ation probably made sense. Charter schools did not provide to local communities facilities akin to what districts did. Today charter schools host town halls. Community theater groups use many charter school auditoriums. Young boys and girls play Junior Jazz basketball in charter school gyms. In other words, charter schools play a virtually identical role in their communities as district schools, so excluding community recreation expenses from the LRF calculation no longer makes sense. It is more difficult to justify the previous exclusion of state guarantees to the voted, board and capital outlay levies. The Legislature created these guarantees to make sure even property tax poor school districts have appropriate funding per student. If a school district imposed these levies, the Legislature would use income tax revenue to backfill that school district’s property tax yield to a minimum level. While not technically a property tax, these guarantees functioned the same as property taxes, and school districts treated them as such. In fact, as far back as 2005 the Utah Foundation argued that the Legislature should include these guarantees in the LRF calculation. GETTING THROUGH THE SENATE During the first week of the General Session, the Senate Education committee approved SB 38 unanimously. No one even testified against the bill. Instead, school district representatives contacted Senators questioning the need for SB 38, and describing the negative impact it would have on their school districts. Following a contentious debate and close vote in the Senate, Senator Lyle Hillyard invited representatives of charter schools and school districts to meet with him, Senator Howard Stephenson and Senator Lincoln Fillmore. He wanted to understand why charter schools felt so strongly about SB 38, and sort out competing claims about “under-” or “over-funded” charter schools. During that meeting, Howard Headlee, chair of the State Charter School Board, and Sen. Fillmore compared their funding estimates with estimates from McKell Withers, Salt Lake School District Superintendent, and Rob Smith, business manager of the Alpine School District. While these estimates differed in some degree, Sen. Hillyard quickly recognized that even the Smith/Withers’ estimates showed charter schools being underfunded by more than $500 per student. Sen. Hillyard also agreed with Smith and Withers that asking school districts to contribute 25% towards the SB Today charter schools host town halls. Community theater groups use many charter school auditoriums. Young boys and girls play Junior Jazz basketball in charter school gyms. In other words, charter schools play a virtually identical role in their communities as district schools CONTINUED ON PAGE 14