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Weber district finance chief warns hold-harmless change will force regular levy reviews
Summary
Business administrator Brock Mitchell told the Weber School District board that a state change shortening the "hold harmless" period from six years to two will push the district to review levy rates annually to avoid losing guaranteed state funding.
Brock Mitchell, Weber School District business administrator, told the board at a work session that a recent change in state law shortening the "hold harmless" calculation from six years to two will increase the frequency the district must review its levies and could reduce guaranteed state revenue if the district does not adjust local levies.
"Hold harmless was a six‑year calculation. The state has changed that...and that's now a two‑year hold harmless," Mitchell said, adding that the certified rate (the sum of the board‑voted and capital levies) is the trigger for a truth in taxation hearing when it increases year to year.
Mitchell explained the components of the district's tax structure: the state sets the basic state levy; the district passes through a charter allocation to local charter schools; debt service (general obligation) is set by the county to meet bond amortization; and the board controls the board‑voted and capital levies. He illustrated how the state guarantee is calculated by multiplying tax increments by the guaranteed rate by the district's WPUs (weighted pupil units).
Using the district's most recent figures, Mitchell said the state guarantee last year was about $58.8 million, local property tax revenue about $42.0 million, with the state making up roughly $16.8 million of the total. He warned that without adjustments the reduction from the shortened hold‑harmless calculation could lower the state guarantee materially: "Our state guarantee would drop to 46,400,000...so you can see with that change, we are down over $12,000,000." He said the state will phase the change over three years at 100%, then 66%, then 33% to soften the immediate impact.
Mitchell presented scenarios showing that (a) making no change would leave the district's local levy revenue stable but leave the district exposed when the hold‑harmless phase‑out completes; (b) reallocating some capital salaries into the voted levy could raise the district's guaranteed revenue without increasing the certified rate; and (c) incrementally increasing the voted levy toward the state's 20‑tax‑increment maximum would raise guaranteed revenue but increase homeowner tax bills. In one example, moving toward 17 tax increments would increase district funds by about $10.2 million and raise the average homeowner's bill by about $73.21 annually based on the illustrative assessed value Mitchell used.
Board members asked procedural questions about deadlines and what a truth in taxation requires. Mitchell said the district must notify the county auditor and Utah State Tax Commission by June 1 if it is even considering a truth in taxation for the coming year, and recommended the board adopt a practice of reviewing levies annually or every two years to respond to changing state calculations and local assessed values.
The board scheduled further public discussion at its June 11 combined study/budget meeting and was told a possible truth in taxation hearing could be held in August if the board chooses to pursue rate adjustments.
Mitchell emphasized the estimates rely on final county assessed values and said several numbers will be more precise once the county auditor closes assessments.
