Legislative leaders want to repeal Utah’s constitutional requirement that income tax revenues can only pay for public and higher education and some social services, arguing it hamstrings their ability to budget for every priority. They’re hoping a promise to significantly increase education funding over the next few years will be enough to get the education community on board.
Utah’s Constitution currently specifies that “All revenue … from a tax on income shall be used to support” public education, higher education and children and disabled individuals. That requirement means lawmakers must fund everything else in the budget through sales and gas tax collections.
Higher-than-anticipated income tax collections have fueled Utah’s massive budget surpluses in recent years, causing an imbalance between the two funding sources. That extra money cannot fund programs outside of those constitutional requirements. Taking away that constitutional earmark would make budgeting much easier.
So, legislative leaders are trying to convince public education stakeholders to support giving up that budgetary safety net.
A legislative proposal obtained by The Salt Lake Tribune seeks to remove and broaden the current constitutional mandate, while requiring the Legislature to “establish and maintain” a “public education budgetary stabilization and funding framework” that would be “subject to revenue growth.”
Lawmakers, in a show of good faith, are proposing a significant boost to education funding through 2030. That includes increasing per-pupil funding in public schools by nearly $240 million, which is a 6% raise.
If voters approve changing the Constitution to remove the earmark in 2024, lawmakers will “freeze” enrollment numbers for public education at the current level for the next five years. Enrollment in Utah’s public schools increased slightly this year and is projected to shrink by up to 1% every year through 2035, according to projections from the legislative staff.
Freezing those enrollment numbers will leave extra money for public education, which the Legislature will use to further increase per-pupil funding in public education. Utah is consistently at or near the bottom of per-pupil spending among all 50 states.
House Speaker Brad Wilson, R-Kaysville, is hopeful those proposed spending increases will be enough to get the public education community on board.
“What we’re offering is much better than what they have now. They don’t have any intent in the Constitution about how the Legislature should manage growth in inflation and student growth,” Wilson said.
2023.02.17 Legislative Proposal by Jeff Parrott on Scribd
Wilson pointed to the agreement lawmakers made with public education advocates in 2020 for Amendment G, which expanded the constitutional earmark to include social services for children and Utahns with disabilities. To get them to sign off on that change, lawmakers passed legislation requiring them to cover extra costs from inflation and enrollment growth and to put money in a dedicated account to cover any future revenue shortfalls.
“That’s helped significantly for public education. If I were them, I’d double down on that. Offering to freeze enrollment even though growth is decelerating is a lot of money,” Wilson said.
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Negotiations with education stakeholders have been underway for several weeks, but the two sides remain far apart. The Utah State Board of Education discussed the legislative offer at their meeting this week. Members expressed discomfort with the vagueness of the proposed constitutional changes and proposed including some more concrete funding requirements for public schools, something lawmakers are hesitant to do.
Sources with knowledge of those discussions who have not been authorized to speak publicly told The Tribune that education officials are committed to remaining at the negotiating table, but time is running out with just two weeks left in the 2023 session.
On Friday, House and Senate leaders appeared to turn up the pressure to reach an agreement by announcing a plan to eliminate the state portion of the sales tax on food, but only if voters approve removing the constitutional earmark for education funding.
Last year, the legislature passed a law renaming the Education Fund to the Income Tax Fund. Then, Wilson said lawmakers were looking for ideas to “give the state the flexibility it needs to manage its budget but at the same time continuing to invest heavily in education.”
Correction: Feb. 17, 2:45 p.m. • This story has been updated to reflect a slight increase in student enrollment this year.
