Tax cuts versus education: What Utah Republicans and Democrats have to say
On their roughly $25 billion budget finalized just before midnight Friday, Utah lawmakers could and should have done better for teachers and classrooms rather than cutting taxes, legislative leaders said Tuesday. Utah Democrats.
Meanwhile, Utah’s legislative leaders continue to chip away at public education tax revenue, D-Salt Lake City House Minority Leader Brian King said, leaving a shrinking slice of future dollars available for education.
But Republican leaders, including House Speaker Brad Wilson, R-Kaysville, and Senate Speaker Stuart Adams, R-Layton, have defended the tax cut and pointed to a still significant increase in funding for education. while giving taxpayer dollars back to Utahns.
The debate is not expected to fade after this year’s session. Republican legislative leaders have proposed a constitutional amendment sometime in Utah’s future, possibly next year, to create more income tax flexibility to fix what they call a “structural imbalance” in Utah’s budget. Income tax revenues have exceeded sales tax revenues, which go into the general fund, or a fund that supports many programs other than education.
The conversation unfolded Tuesday at a panel discussion hosted by the University of Utah’s Kem C. Gardner Policy Institute in partnership with Deseret News and Utah Policy at the Thomas S. Monson Center in Salt Lake City. Deseret News editor Doug Wilks moderated the conversation.
The Utah Legislature has done some “good stuff” including a “significant” $55 million for super-affordable housing, $40 million for Great Salt Lake, and more than $200 million for water meters. secondary water, King acknowledged. But he said his biggest gripe was with the Legislative Assembly’s approach to funding education, noting that only $12 million had been funded for full-day kindergarten.
“We’re a bit schizophrenic in the Utah legislature on education funding,” King said.
Utah ‘must do better’ on education
Under the Utah Constitution, income tax revenues are specifically earmarked for public education. But over the past 25 years, King said it had been “intentionally” curtailed, and it was a “problem”.
“We have consistently and intentionally diverted funds from our tax revenues for other purposes,” King said.
He pointed to two constitutional amendments over the years, including 1996, when lawmakers “watered down” funding for public education while adding higher education eligibility to income tax revenue. He also pointed to 2020, when Utah voters approved Amendment G, which allowed income tax revenues to fund programs for children and people with disabilities.
King also pointed to 2018, when lawmakers cut the state income tax rate from 5% to 4.95%, and this year, when lawmakers cut the state income tax rate to 4.85%.
“The impact of this is to reduce the funding available for K-12 and for higher education,” King said. “And that’s something that concerns me in light of the fact that we’re still near the bottom if not the bottom of education per student.”
King acknowledged that the Legislature had funded a 6% increase in the weighted student unit, as well as an overall 9% increase in the budget for public education. But he noted that Utah continues to be among the lowest in the nation for spending per student and “middle of the pack” for student performance.
“We must and must do better,” King said. “And some of the things we do in the Legislative Assembly are inconsistent with that goal, that dignified ideal, which in my view is the greatest investment we can make as a state.”
Senate Minority Caucus Director Gene Davis, D-Salt Lake City, said lawmakers have “failed” to educate the public this year. “We could have done more, and we should do more.”
“We’re losing teachers because we don’t compensate teachers adequately,” Davis said.
‘I think it was a nice little gesture on the part of the Legislature to give families $100 (per year),’ he said, but he opposed the tax cut this year because he thought the money would be better spent on classrooms and on state employee salaries.
Wilson said he finds the sense that the Utah legislature had better use of $193 million in taxpayer money “very troubling.” He noted that for some Utahns, especially those on fixed Social Security incomes and those eligible for the non-refundable earned income tax credit, they will benefit from more “targeted” tax cuts which, for some, could total “hundreds of dollars more” a year.
“One of the things that frustrates me on Capitol Hill,” Wilson said with a laugh, “is when lawmakers act like it’s their money. It’s not lawmakers’ money. Utahans’ money that they send to us to decide how to invest and what we should spend it on.
The “principle” behind this year’s $193 million tax cut and last year’s $80 million tax cut, Wilson said, is “maybe we should make Utah a little more affordable to Utahns and take less of their money.”
If Adams and Wilson “get our way,” Wilson said, “we’d like to cut taxes again next year, a little, in a responsible and sustainable way.”
Wilson said there will always be needs in government, but lawmakers “have done their best to balance all the needs across the state.”
“I will never apologize for letting Utahns keep a little more of their own money,” Wilson said, especially when inflation is up 7% across the country and in the West, from more than 9%. “It’s their money to choose how to spend.”
Adams said tax policy “drives the economy,” noting that Utah competes with states like Wyoming that have no income tax. It’s a balancing act, he said, acknowledging that some Utahns thought this year’s tax cut wasn’t enough and some thought it wasn’t necessary.
“I think we got it right,” Adams said.
But King disagreed. He said if there were people in Utah who would move to another state to lower their income taxes, he would invite them to leave.
“You know what I say about those people? Go to these states. Because I don’t want that attitude in the state of Utah, in the residents here,” King said. “I want someone who’s more willing to say it’s not about me and every last dollar I can get.”