Granite Board: Tax rate not certified, district faces $14.5M operating and $3.2M capital shortfall

Granite School District officials told the Board of Education on Nov. 18 that the state tax commission did not certify the district—s proposed tax rate after finding a procedural deficiency, producing an estimated one-year shortfall of $14,500,000 in operating revenue and $3,200,000 on the capital side.

Todd Hubbard, who led the presentation, said the commission—s letter (dated Sept. 17) found the district failed to publish the tax hearing as a separate, standalone agenda item from the regular board meeting. "Because their authority changed, they could not certify unless all provisions had been adhered to," he said, adding the certified rate reverted to the county auditor—s pre-hearing rate.

The board does not lose the ability to pursue a rate change in future tax cycles, Hubbard said, but the immediate effect is a one-year disruption. "We have a 1 year disruption in our budget," he told trustees, and presented a menu of mitigation options.

Administrators proposed a combination of measures intended to manage cash flow this fiscal year without cutting state- or federally-restricted programs. Those options include holding discretionary spending; implementing a soft hiring freeze (reviewing vacancies before filling them); delaying nonessential IT and ERP projects; pausing instructional-coach hires (estimated savings about $1 million); and applying a modest across-the-board budget review of roughly 1—2 percent that could produce about $3.7 million in unrestricted savings.

Hubbard highlighted reserve options: an actuarial review of the district—s retirement fund showed improved investment returns and a roughly $11,300,000 excess reserve that could be tapped. "We would look to the excess reserve for the retirement program into the amount of about $8,500,000," Hubbard said, noting the action would not change employee benefits but would require board oversight for some statutory accounts.

On the capital side, administrators said about $900,000 of the $3.2 million gap was for deferred maintenance that could be postponed; other pay-as-you-go funds could be managed through scheduling or, as a last resort, asset liquidation. Hubbard cautioned that selling assets would be permanent and would not require recapture in future tax cycles.

Trustees asked whether restricted federal and state programs could be reduced to help the property-tax shortfall. Hubbard replied that most restricted programs (Title I, special education, federal grants) cannot be used to cover an operating shortfall driven by a property-tax certification issue and that decisions about those programs would be separate budget conversations.

Hubbard also warned of other pressures that complicate planning: a legislated $7,000,000 state funding reduction already identified for future years, potential Title-program declines (about $4.5 million estimated), a roughly $2,000,000 Medicaid FMAP change, and uncertainties tied to federal appropriations. He recommended the board approve a blended approach to get through the current fiscal year and revisit tax-rate decisions in the next cycle.

Next steps: administrators said they would continue modeling combinations of reserve use, targeted delays and hiring controls and bring specific recommendations back to the board ahead of any formal budget or tax-rate decisions.