SALT LAKE CITY — A tax watchdog group is accusing Utah's largest school district of attempting to dodge voters and the legislature by pushing a $175 million bond ahead of a new law going into effect.
The Alpine School District has scheduled a public hearing next week as it considers a $175 million "lease revenue bond" for a new school near Saratoga Springs. A lease revenue bond is a distinctive type of bond that doesn't need voter approval, where general obligation bonds wind up on a ballot.
"The taxing entity just forms another entity still made up of themselves and says 'Let's just lease it from ourselves' to get around this voter requirement by the constitution," said Rusty Cannon, the head of the Utah Taxpayers Association. "Any time you issue debt that's backed by property taxes, the constitution of Utah says you need voter approval. Yet this was created and blessed by the Utah Supreme Court 40 years ago in saying this is a fair workaround. Since then they've been abused."
This year, the Utah State Legislature passed a Senate Bill 86, which sets a $200 million cap on lease revenue bonds. But that new law won't go into effect until May 1, assuming it's signed by the governor. In 2022, voters rejected the Alpine School District's proposed $595 million general obligation bond for new schools and over the years, the district has issued a series of lease revenue bonds totaling $165 million to fund new construction.
The Utah Taxpayers Association accuses the district of defying the will of the legislature and attempting to undermine voters with this latest maneuver by pushing through another bond before the new law goes into effect.
"We understand this is the fastest growing and the largest school district in the state and it has its own unique issues," Cannon said. "It doesn’t change the fact that voters have to pay for, taxpayers have to pay for all this debt. They should be able to give approval for it and this process just cuts them right out."
The Alpine School District told FOX 13 News in a statement on Wednesday it is only considering such a bond as it deals with immense growth.
"The Board has indicated its intention to consider a Lease Revenue Bond for the purpose of building a new high school. The growth in the west continues to climb, and by 2028, Cedar Valley High School and Westlake High School are projected to have a combined enrollment of over 6,000 students," the district said. "A Lease Revenue Bond (LRB) is one way to fund the construction of a new high school. Based on recent legislative changes, the board wants to study the impact it has on our capital plan efforts. No decision has been made on a Lease Revenue Bond, only the board’s intention to study the topic."
Sen. Lincoln Fillmore, R-South Jordan, who sponsored SB86, told FOX 13 News he hopes the Alpine School District reconsiders.
"It's disheartening to see the Alpine School District bypassing the established legislative process. What's even more concerning is their repeated disregard for the voters' wishes by accruing debt without a plan for generating additional revenue to repay it. Accountability to taxpayers should be the priority of significant investments, and I strongly encourage the Alpine School District to reassess their decision-making process," he said in a statement.
Governor Spencer Cox has not signaled whether or not he intends to sign or veto SB86 into law. The Alpine School District has scheduled a public hearing on the proposed lease revenue bond on March 19 at 6pm at the district's offices in American Fork.
