Republican legislative leaders are proposing an amendment to the Utah Constitution that would effectively eliminate a decades-old income tax earmarking for public education.
House Speaker Brad Wilson, R-Kaysville, speaking to the Utah State Board of Education on Tuesday, said change was needed to give lawmakers more budget flexibility to a when sales tax revenue does not grow at the same rate as income tax.
“We don’t really have a revenue problem in the state of Utah, but we do have a budget problem. We don’t really have the flexibility as policy makers here on Capitol Hill sometimes, to respond to statewide needs the way we think we should be,” he said. declared.
Voters would be urged to amend the constitution to remove the “firewall” between sales tax and income tax. The proposal “would continue to prioritize education funding with additional safeguards,” according to Wilson’s presentation to the state’s elected school board.
The proposal also plans to eliminate the sales tax on food, which a third of Utah residents said they prefer among tax cuts the Utah legislature could pass this session, according to the results of a new Deseret News/Hinckley Institute of Politics poll.
The poll found that 33% of Utahans favor eliminating the sales tax on food; 22% supported lowering the income tax rate while 15% said they supported lowering the income tax rate for low-income Utahns only, according to the poll.
The poll, conducted by Dan Jones & Associates from Feb. 7-17 — before GOP leaders released details of a proposed constitutional amendment — polled 808 registered voters in Utah. The poll has a margin of error of plus or minus 3.45 percentage points.
In 2020, 54% of Utahns voted for Amendment G, which allows income tax to also be used for child and disability services.
HB357, the companion legislation to the resolution that put the proposed 2020 Constitutional Amendment on the ballot, statutorily obligates lawmakers to fund enrollment growth and inflation and provides a safety net to protect education funding. education in the event of an economic downturn and other unforeseen circumstances.
While Amendment G offered more flexibility, projections suggest Utah needs to do more to get ahead of the imbalance between revenue and sales tax receipts.
“One thing we’re good at in this state, and hopefully we can continue to be good at, is avoiding trouble before it happens. It’s not a crisis today, but in a year or two some really, really tough things are going to happen. It’s not really in our nature as a state to wait to be in the middle of the ocean floating without a life jacket,” Wilson said.
Another proposal considers amending the Utah Constitution to add a provision that the legislature “shall establish programs to stabilize public education budgets and mitigate economic downturns,” according to Wilson’s proposal.
The latter was created as a result of the passage of Amendment G, but the new proposal would place it in the constitution rather than state law.
To place a constitutional amendment on the November ballot, a joint resolution would need to be passed by both legislative chambers with a two-thirds majority.
The State School Board has not taken a position on the proposals. Board chairman Mark Huntsman said the next opportunity for the board to respond would be its meeting scheduled for Thursday.
Wilson and Senate Majority Whip Ann Millner “checked (the) temperature” and “appetite” of the education community on the proposal, Huntsman said.
“I think it’s moving forward with or without us,” he said.
Utah Senate President Stuart Adams, R-Layton, speaking to reporters at the Senate’s daily press conference on Tuesday, said part of the problem is that income tax is ” extremely volatile” depending on economic conditions.
In 2008, “we had an 8% increase in income tax. The following year, we had a 10% drop. The following year, we had a drop of 9%. Thus, over a three-year period, we have seen a variation of almost 35 to 40% in income taxes. And when we have an unstable funding system for education, that creates problems and part of that problem is our balance between general fund sales tax and income tax,” he said. .
“We actually thought that with Amendment G it would be a while before we could look at these kinds of imbalances,” but it seems like more action is needed, Adams said.
Millner, speaking to reporters, agreed that lawmakers had hoped Amendment G “would carry us for a while in giving us the budget flexibility we need, because it’s not, as people know. , it’s not about income. It’s really about budget flexibility,” she said.
When revenue streams are “targeted at particular budgets to fund,” it’s difficult for legislators “to really focus on the high-priority needs of the state, which is what we’re tasked with doing,” Millner said.
She continued: ‘So we’re trying to find a way to give ourselves some flexibility in the constitution in terms of being able to exercise our ability to support and fund things while still providing some protection for public education because that’s is really important for public education.
Income taxes have been spent on education since the 1940s. A 1996 Constitutional Amendment expanded the definition of public education to include higher education and Amendment G allowed certain services for children and people with disabilities to also be financed by income tax.
Having an earmark on revenue doesn’t necessarily translate “to money in a budget,” Millner said.
“We would like to reframe that a bit and try to say, ‘How do we make sure that really translates into stable funding in the budget, predictable budget growth, rainy day funding that will also be protected and our public education stabilization fund is also protected so that we can have a really cohesive approach to public education going forward,” she said.
Contributor: Katie McKellar