Senate approves third substitute of SB97 to raise state property-tax base for school equalization

Senators voted 22–7 to advance a third-substitute version of Senate Bill 97, a measure the sponsor described as a targeted increase to the state basic property-tax rate intended to reduce wide disparities in public-school funding.

Sponsor Senator Osman told colleagues he has worked on the proposal for three years and showed data he said demonstrated sharp variation in property value and per-student revenue across Utah school districts, citing examples that in his presentation South Sanpete generated about $1,409 per student while Park City generated about $6,737 per student. He said the bill would capture a portion of revenue lost to inflation since 1996 and set aside approximately $75,000,000 in a restricted account to fund equalization programs: 75% to a voted-leeway guarantee and 25% to capital-outlay equalization.

Why it matters: the sponsor framed SB97 as a permanent revenue source for ongoing equalization rather than relying on variable annual appropriations. He warned that, if the Legislature fails to act, courts in other states have ordered large fiscal remedies — he cited an Arizona decision tied to a roughly $1.6 billion adjustment — and said litigation pressure is part of the urgency behind the proposal.

Debate and dissent: opponents emphasized the political and fiscal difficulty of raising taxes during a budget surplus. Senator Bramble said he ‘‘doesn’t like tax increases’’ but argued the Legislature may otherwise face court-imposed remedies. Senator Stevenson explained his aye vote despite staff and employer objections, framing the decision as one to address inequity across students and districts.

Details and safeguards: the sponsor said the bill would increase the basic rate enough to produce about $75 million and place the additional revenue in a restricted account dedicated to statutory equalization programs. He described formula revisions intended to direct 75% of the funds to recognize districts that have exercised taxing effort (voted leeway) and 25% toward underfunded capital-outlay programs.

What happened next: the Senate recorded explanations of votes during a roll call and ordered the third-substitute read for a third time following the 22–7 tally. The bill will continue through the Legislature’s remaining steps.

The sponsor and several colleagues framed the vote as a difficult but necessary choice to lessen funding inequities for districts that generate far less revenue per student; critics warned of the political pain and potential impact on districts that will see money move elsewhere in the state.