Aging schools drive North Sanpete’s $750K property tax increase

MT. PLEASANT—The North Sanpete School District plans to increase its annual property tax revenue by $750,000 to address capital and infrastructure needs following a Truth-in-Taxation a public hearing Aug. 11 and a school-board vote Aug. 18.

The increase would raise the district’s projected property tax revenue by 15.46% over the previous year, excluding revenue from land and structures added to the tax rolls over the previous year, which are defined as “new growth.”

The school board voted 4-1 to approve the increase, with board member Joseph Cook voting “no.” The increase must still be approved by the Utah State Tax Commission, but that approval centers on correct numbers and procedures, not the substance of the increase.

The additional money will be split between two needs: about $650,000 for capital projects and $100,000 to offset curriculum costs, Superintendent O’Dee Hansen said.

But the district’s case for the increase extends beyond the immediate need to repair aging buildings. Hansen said the district must also continue increasing its local tax effort to preserve access to state education funding. If it doesn’t, he said, it could cost the district millions of dollars.

Cook, who opposed the increase, said the district should look for other sources of revenue and try to reduce spending before asking taxpayers for more money.

“There are other ways to get money without breaking the backs of the citizens,” Cook said. He pointed to funding the South Sanpete School District received this year through the Utah Office of Education Applied Professional Education Experiences (APEX) grant program. South Sanpete was awarded more than $13 million, for new facilities and instruction in career and technical education at Manti High School.

Cook said school districts can sometimes obtain grants, special congressional appropriations and other funding simply by seeking out opportunities. “In many cases, all you have to do is ask,” he said.

Referring to the school-district budget, he said, “There’s a lot of fat that needs to be cut out.” As one example, he cited compensation provided to school board members for attending meetings, along with health and life insurance benefits. He said the district spent about $27,700 on those forms of compensation per board member.

Cook contended public service should be unpaid. He said he personally does not accept those payments.

The school board did not vote on the tax increase proposal at the Aug. 11 hearing. Board members postponed the decision until Aug. 18 meeting to give district officials more time to explain the increase and its effect on taxpayers.

Impact on typical homeowners

According to Rickie Stewart, district business manager, on a home assessed at $400,000, the district’s portion of the annual property tax bill would go from $557.26 to $644.82, an increase of $87.56.

For a commercial property assessed at $400,000, the annual increase would be $159.20, from $1,013.20 to $1,172.40.

Stewart said the increase amounts to just a 3% increase in an average homeowner’s property tax bill, because the school district accounts for only part of the overall bill.

Cook questioned whether taxpayers fully understand how much they already pay to the school district and how much their bills will increase under the new tax rate.

The Truth-in-Taxation notice published before the hearing used a $400,000 home as an example. But Cook said that example may not fit homeowners whose properties are valued substantially higher.

Cook said the county auditor told him that about seven out of 10 homeowners pay their property taxes through their mortgage payments. Such taxpayers may not realize how much of their property tax bill goes to the school district.

“It’s not lost on any of us that nobody wants a tax increase,” Stewart said. “We understand it’s an incredibly difficult situation right now, the economy, the way things are right now. A tax increase is not ideal for any of us. We’re all taxpayers.”

A backlog that keeps growing

The most important reason for the increase, according to Hansen, is district buildings.

North Sanpete operates a collection of aging schools that require increasingly expensive repairs and maintenance. Hansen said the district approved one of its largest capital improvement budgets in recent years last year, spending about $2.2 million. Even so, the district had roughly another $2 million in capital needs that went unfunded.

“We’re not making progress,” Hansen said. “We’re actually going the opposite direction with our capital needs.

“Having to replace roofs and gym floors and get air conditioning into our schools, all these things, they add up, and we’re not making progress,” Hansen said.

The district also faces rising curriculum costs, including expenses associated with state-required instructional materials. Hansen said $100,000 of the increase would help offset the cost of the math and reading curriculum, but that amount would not cover the entire expense. The remaining $650,000 will go toward capital needs.

“None of this has to do with any salary benefits, any extra positions or anything like that,” Hansen said. “It’s dealing with some of our major needs in our infrastructure.”

The state funding equation

The district’s financial situation is complicated by changes to Utah’s school funding formula.

The state provides substantial funding to school districts through the Minimum School Program, but districts are required to maintain a certain level of local tax effort to qualify for the full amount of state equalization funding.

North Sanpete began adjusting its tax rates last year after the Utah Legislature increased the effort required of school districts.

The district’s 2025 tax increase was approved by the school board but, like many tax increases around the state, was never instituted because the district didn’t comply to the letter with new Truth-in-Taxation procedures and disclosures.

By 2029, Hansen and Stewart said, North Sanpete will need to have increased its local effort enough to avoid losing roughly $2.5 million in state funding. That amount represents slightly less than 10% of the district’s total budget.

“If we don’t, then we lose out on about $2.5 million of state funding,” Stewart said. That sum “is substantial in terms of trying to meet the needs of the students in this district while maintaining buildings, curriculum.”

The prospect of losing that money is one reason district officials say the tax increase cannot be viewed solely as a way to raise money for immediate expenses. It is also an attempt to position the district to continue receiving money from the state.

The Truth-in-Taxation process

Under Utah’s Truth-in-Taxation system, a taxing entity that wants to collect more property tax revenue than it would receive under its existing certified tax rate must notify taxpayers, hold a public hearing and take a recorded vote.

The certified tax rate is designed to generate roughly the same amount of property tax revenue as the previous year, excluding certain adjustments such as new growth.

That means a taxing entity does not automatically receive more money because property values rise.

Keeping taxes low

District officials acknowledge that the increase comes at a difficult time for many households.

They also argue that North Sanpete has historically kept its school district tax rate relatively low.

Hansen said the district’s rate is the lowest among the 10 neighboring school districts and will remain near the bottom even after the increase. “We’re trying to keep it as low as we possibly can as well,” the superintendent said.

But the district’s expenses do not remain static. The cost of fuel for school buses rises. So does the cost of feeding students. Curriculum becomes more expensive. Buildings deteriorate whether money is available to repair them or not.

Hansen said the district is trying to balance two competing demands — keeping taxes as low as possible while investing enough to prevent its buildings and finances from falling further behind.

Hansen said the district intends to scrutinize its spending as it takes on additional revenue.

“We’re going to reevaluate every department,” he said. “We’re going to make sure that we’re spending every dollar wisely and that we can justify the results of any taxpayer money that we’re getting.

“Our job is to work incredibly hard to make sure that we are making progress, and that we are doing the best thing for kids, and the outcome is student success,” he said.