Capital Outlay Foundation and Enrollment Growth
Capital Outlay Foundation Program
In the 2008 General Legislative Session, the Capital Outlay Foundation Program was changed. Based on UCA 53A-21-202, for fiscal years beginning on or after July 1, 2008, the State Board of Education shall determine the foundation guarantee level per ADM (average daily membership) that fully allocates the funds appropriated for distribution.
If a qualifying school district imposes the highest combined capital levy rate in the prior year, the State Board of Education shall allocate an amount equal to the product of the following.
The qualifying school district's prior year ADM; and an amount equal to the difference between the following:
- the foundation guarantee level per ADM for that fiscal year and
- the qualifying school district's prior year property tax yield per ADM
During the 2010 General Legislative Session, the Capital Outlay Foundation program was modified by:
- eliminating the base funding except for school districts with fewer than 1,000 pupils in average daily membership;
- setting the base tax effort rate at the average of the highest school district's capital and debt service levies and the statewide average of school districts' capital and debt service levies; and
- directs the State Board of Education to determine a school district's allocation of funds under the program using data from the fiscal year two years prior to the fiscal year the school district receives the allocation.
Enrollment Growth Program
The Utah State Board of Education shall distribute monies in the Enrollment Growth Program to qualifying school districts whose average net enrollment for the prior three years is a net increase in enrollment and the yield per ADM is less than two times the prior year’s average yield per ADM for Utah school districts. A school district that meets the above criteria shall receive Enrollment Growth Program monies in the same proportion that the district’s three-year average net enrollment bears to the total three-year net enrollment of all the districts that meet the above criteria. During the 2010 General Legislative Session, HB 117 modified the fiscal year of the data that is used to determine a school district's allocation of funds under the Enrollment Growth program.
Use of Funding
According to UCA 53A-21-102, a school district may only use the monies provided under this chapter for school district capital outlay and debt service purposes.
Capital Outlay Levy
During the 2008 General Legislative Session, UCA 53A-2-118.3, Imposition of the capital outlay levy in qualifying divided school districts, was passed. This statute states that beginning with the qualifying taxable year, in order to qualify for receipt of the state contribution toward the minimum school program, a school district within a qualifying divided school district (within a county of the second through sixth class) shall impose a capital outlay levy of at least 0.0006 per dollar of taxable value. The county treasurer shall then distribute that revenue to the school districts located within the boundaries of the qualifying divided school district based on 25% of a school district's percentage of the total enrollment growth in all of the school districts within the qualifying divided school district that have an increase in enrollment and 75% to be distributed in proportion to a school district's percentage of the total current year enrollment in all of the school districts within the qualifying divided school district, as of the October 1 enrollment counts. In addition, beginning January 1, 2009, in order to qualify for receipt of the state contribution toward the minimum school program, a local school board in a county of the first class (Salt Lake County) shall impose a capital outlay levy of at least 0.0006 per dollar of taxable value. This revenue will be distributed in the same manner as described above for the school districts in the county of the second through sixth class.
A local school board may borrow money in anticipation of the collection of taxes or other revenue of the school district so long as it complies with Title 11, Chapter 14, Local Government Bonding Act. The board may incur indebtedness under this section (53A-18-101) for any purpose for which district funds may be expended, but not in excess of the estimated district revenues for the current school year.
Revenues include all revenues of the district from the state or any other source. The district may incur the indebtedness prior to imposing or collecting the taxes or receiving the revenues. The indebtedness bears interest at the lowest obtainable rate or rates.
A local school board may require the qualified electors of the district to vote on a proposition as to whether to incur indebtedness, subject to conditions provided in Title 11, Chapter 14, Local Government Bonding Act, under the following circumstances:
- if the debts of the district are equal to school taxes and other estimated revenues for the school year, and it is necessary to create and incur additional indebtedness in order to maintain and support schools within the district; or
- the local school board determines it advisable to issue school district bonds to purchase school sites, buildings, or furnishings or to improve existing school property.
- Debt Analysis/Financial Stability. This document shows the financial stability of school districts under the Utah Bond Guarantee Act.
- History of School District Capital Facilities Bonding (1992-2013). This document displays a history of capital facilities bonding of school districts from 1992 through 2012 and whether or not the bond election passed.
Quality Zone Academy Bonds (QZAB)
For questions regarding the information on this page, please contact cathy [dot] dudley [at] schools [dot] utah [dot] gov (Cathy Dudley), MSP Budget and Property Tax Specialist, Phone: (801) 538-7667 or Fax: (801) 538-7729.