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Funding Policy
Federal Government Funding Policy
Federal Government
Federal Government
The federal government plays a limited, yet important, role in education funding. Federal funds account for approximately 10% of Utah’s education budget, but that 9-11% (depending on the year) goes to some of Utah’s most disadvantaged students. The majority of this money is given out through three major grant programs: Title I, School Lunch, and Special Education. Title I is designed to provide funding to schools in low-income areas so they can provide the same quality of education that schools in higher income areas can. provides free and reduced lunch for students who otherwise would not be able to afford it. And the Special Education program provides funding to states to help offset the high cost of educating students with special needs.
With the exception of IDEA Law (which legislates accommodations for students who require special education) the State of Utah does not have to participate in federal programs and would therefore be exempt from having to follow many of the rules created by the Department of Education. But forfeiting these dollars would have a devastating impact on Utah’s most disadvantaged students.
State Government Funding Policy
State Legislature
State Board of Education
Governors Office
State Charter School Board
State Legislature
The Legislature’s primary role in education funding is mandating the collection of income tax, appropriating that revenue to the state’s education system, and delegating distribution formulas to the State Board. The mechanics of this process are seemingly always in a state of flux, but the general concept remains the same. The process is as follows:
Schools are funded by the Minimum School Program. The Minimum School Program is comprised of state income tax and local property tax dollars and ensures the minimum amount of funding each school should receive according to its circumstances. The main mechanism used to determine how much money a school needs is the Weighted Pupil Unit (or WPU for short). The weighted pupil unit is how the state determines how much money each school should receive based on the needs of its students. An average student receives one WPU. The amount of the WPU changes each year, but in fiscal year 2018 it was $3,311. Kindergarten students receive half of a WPU because they are in school only half of a day, and a special needs student receives 2.53 WPU’s because they require more staff and equipment to meet their educational needs.
For the sake of simplicity, let’s pretend there are two schools: school A and school B. School A has 100 students, none of whom need special education services. School B has 100 students, 20 of whom need of special education services. Accordingly, school A would receive 100 WPUs worth of funding (or 1WPU x 100Students x $3,311= $331,100) whereas school B would receive 130.6 WPU’s worth of funding (or [1WPU x 80Students x $3,311] + [2.53WPU’s x 20Special Education Students x $3,311]= $432,417).
*It is important to know that WPU funding is not based off student headcount (the number of bodies in the building) but instead by Average Daily Membership. Average Daily Membership is best described as the amount of time each student spends in the school. Students who are taking a full course load are generally counted as a full WPU, whereas students who are only taking a half or 3/4th course load are counted as less than a full WPU.
While the majority of funding is provided to schools through the Minimum School Program, there are other funds the state distributes that are not included in the MSP or the WPU. These additional funds are given in accordance with initiatives that provide additional support to students and schools where needed. These initiatives include things such as funding the concurrent enrollment programs at high schools, providing education for youth who are in custody, ensuring that the areas around schools are safe for kids to walk, etc.
State Board of Education
The State Board of Education oversees the use of federal and legislative funds and manages state funds that are not distributed via the WPU. The Legislature appropriates money to the State Board of Education, and the State Board is tasked with distributing those funds to school districts and charter schools based off the policies and formulas described above. The process of distributing those funds requires significant staff effort and is key to getting schools the correct amount of funding.
The State Board is tasked with managing this money and ensuring that it is spent in accordance with the programs and initiatives the Legislature has created. If the State Board finds a district or a school is not spending federal or state money in accordance with law and policy, then the State Board can discipline the district or school by preventing future funds from going to the local education agency.
Governors Office
The Governor has little authority when it comes to education funding. Besides recommending a state budget (which the Legislature does not have to accept), the Governor and his staff run a handful of grant programs that impact schools and districts. The STEM Action Center is an example. The Stem Action Center is a program that gives money to schools to help students develop STEM skills. Because the STEM Action Center is housed in the Governor’s office, he and his staff are tasked with managing those funds and determining if schools are using them properly.
State Charter School Board
The State Charter School Board has two roles in education funding: authorizing and ensuring compliance. The State Charter Board reviews new charter school applications and can accept or deny them. If the application is accepted (or authorized), then the enrollment projections are created for the new charter school, and funding amounts are determined based off those projects. After the State Charter Board has distributed money to charter schools, the board is responsible for monitoring charter schools and ensuring that they are using federal and state funds in accordance with law and policy.
Local Funding Policy
School Districts
Public Schools
Charter Schools
School Districts
School districts generate funding for schools through two taxes: the capital tax and the property tax. There are five processes a district school board can use to increase these taxes, and they fall under two categories: non-voted and voted.
Non-Voted
The processes that do not require a public vote are the “Basic Levy”, the “Board Levy”, and the “Capital Levy”. The Basic Levy refers to the property tax required by the Minimum School Program. The Legislature requires that districts use their taxing authority to tax the private property within the district’s boundaries at a rate of at least .0016%. This rate may look extremely small, but when multiplied by the value of the property being taxed, it can generate good amount of money. For example, if a property within the district’s boundaries is worth $500,000, then taxing it at a rate of .0016% would generate $800 per year.
Some properties are much bigger than others, which makes it easier for some districts to raise money for schools. An example of this can be found when comparing Park City and Tintic school districts. The average value of private property in Park City is far larger than the average value of private property in Tintic. This makes it harder for Tintic to collect the funding needed to operate its schools. Because of this, the Legislature, through the Minimum School Program, has established a way to partially equalize the funds coming from each district. For details on how this equalization works, read this slide deck created by the Office of Legislative Research and General Counsel.
The Board Local Levy is an optional tax a local school board can implement to raise more money without a public vote. The Legislature has set a limit to the maximum rate a board can tax through the Board Levy, and that rate is .0025. The money raised through this tax is used for district operations (raising teacher pay, hiring district and school staff, etc.).
The Capital Levy is another tax the school board can use without voter approval. This tax comes into play whenever a private building is built within a district’s boundaries. The money raised from the Capital Levy is used to build schools, buy buses, and help cover any other construction costs. The legislature has set a maximum rate a district board can implement and that rate is .0025.
Voted
The two processes that require voter approval are the voted levy and the debt service levy. The voted levy is a tax voters can use to raise taxes for district operations (raising teacher pay, hiring district and school staff, etc.). The voted levy increases property tax revenue above what is collected from the Basic Levy. Voters can approve a tax rate up to a statutory set maximum of .0020. This process was put into place so that local voters could choose, if they wanted, to tax themselves more than the minimum level of funding required by the Legislature.
The second process that requires voter approval is the Debt Service Levy. The Debt Service Levy is a property tax increase used by districts to pay for general obligation bonds. A bond is a loan given to the district by a bank to pay for large construction projects like building a school. To obtain a bond, the District asks voters to approve a temporary raise in property taxes in order to pay for the bond. The property tax will return to normal once the bond is payed off.
In addition to raising funds via taxes, school districts have a large role in determine how funds are used. Because districts develop budgets for schools, they have significant influence in determining the salaries of administration and teachers, how much money schools have for equipment, and other important financial decisions.
Truth in Taxation
While district school boards have the authority to raise property taxes without having to receive voter approval, school board’s must go through a process called Truth in Taxation before they raise property taxes. According to Truth in Taxation laws, the amount of money a school district raises through property tax remains the same unless they hold a series of public hearings explaining why they desire to raise the guaranteed amount of funding. This is an important distinction: according to Utah Law, the number of dollars generated by property tax stays the same each year, which forces the property tax rates to change each year. If property values go up, the property tax rate goes down. If property values go down, property tax rates go up. This ensures that district revenues stay constant and prevents property tax rates from dramatically increasing year over year.
Public Schools
Traditional schools have little flexibility when it comes to how they spend their money. Because districts determine school budgets, the amount of money schools can spend on teachers, textbooks, equipment, etc. has already been decided.
Charter Schools
Charter schools are funded by the Minimum School Program. However, because charter schools are unable to collect property tax, the Legislature has created an additional funding stream that only charters can access. This additional funding stream is called the Local Replacement Fund, and it provides charter schools with an additional sum of money per student (in 2013 it was $1,710).
