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Summary: Under current law, school districts must hold an election every time they adopt a tax rate exceeding their current rollback tax rate, even if the increased rate is lower than a rate previously approved by voters and even when attempting to reduce their tax rate to a level that is higher than their current rollback tax rate. Supporters of this legislation contend that the election requirement for tax rate changes financially burdens school districts and reduces a school district’s ability to adjust tax rates depending on current economic conditions. Current election requirements also discourage school districts from reducing local tax rates for fear that voters would not reapprove tax rates at as high a level, so they maintain tax rates that take in more revenue than is necessary.
HB 671 would let voters approve a cap for a school district’s tax rate in an election, and allow school boards to set tax rates anywhere below that cap without having voters approve a rate increase or decrease. Taxpayers in these school districts would have to approve an increase in the cap at an election.
Analysis: HB 671 gives voters the opportunity to limit government initially by allowing voters to set a cap, placing an upper limit on the rate to which their rollback tax rate can be increased. This provides flexibility to school boards to set rates below this cap without the need for costly elections to approve every rate increase, potentially saving taxpayer resources. This may allow some school districts to actually lower rates, knowing that they could raise the rate back to the currently approved level without having to go through the expense of an election to do so.
By making it easier for school districts to cut tax rates, this legislation allows for the scope of government to be diminished.
By allowing the taxing authority to raise rates up to a certain cap, individual liberty to speak into each rate hike is diminished. For this reason, we believe voters should have to approve all rate increases proposed by a school board, even if the proposed increase simply returns to a previously voter approved rate.
Due to this conflict between our principles of limited government and individual liberty, we are neutral on HB 671.