Gov. Spencer Cox has vetoed a bill that would have diverted Utahns’ property taxes away from local public schools to the state’s general fund, saying it “sends the wrong message” about the state’s commitment to education funding.
In a letter Monday to House Speaker Mike Schultz and Senate President Stuart Adams explaining his veto, Cox wrote that SB37 would fundamentally change how the state collects and distributes property tax revenue for schools — a change he said he opposed.
“Right now, Utahns are correctly told by their government that their local property tax dollars are going to fund their local schools,” Cox wrote. “SB37 represents a clear departure from this practice.”
Cox’s decision comes about two weeks after the Utah State Board of Education passed a resolution urging Cox to veto the bill.
“I am grateful the governor was thoughtful and considered the Utah State School Board’s request to veto SB37,” state board member Sarah Reale said in a statement to The Salt Lake Tribune. “When folks on opposite sides of the political and policy spectrum can come together united against a bill, it is a clear sign it needs to be reconsidered.”
The USBE echoed Reale’s sentiments in a statement Monday following Cox’s announcement, saying that the “value of public education funding has been reaffirmed today” through the veto.
“We are grateful that the governor has chosen to stand alongside USBE and uphold Utah’s commitment to strong public education and local control,” the statement said.
The Utah Education Association, the state’s largest teachers’ union, also applauded the veto.
“This bill would have redirected public education funds away from Utah’s public schools and weakened local control,” UEA said in a statement Monday. “Utah must preserve education funds for their intended purpose: supporting the success of Utah’s public school students.”
In Cox’s letter to Schultz and Adams, he noted that USBE wasn’t alone in its opposition. The State Auditor, the Utah School Boards Association and the Utah School Superintendents Association also requested he veto the bill — which, Cox wrote, ultimately led to his decision.
(Christopher Cherrington | The Salt Lake Tribune)
Why Cox said he opposed SB37
If SB37 was to become law, school districts would be required to deposit all property tax revenue into Utah’s general fund. The state would still have to pay districts the minimum funding amount — set at $4,494 per student for fiscal year 2025 — but could use income tax revenue to do that, freeing up the local property tax dollars for other state purposes.
Those opposed to SB37 have argued it would sow division between local school boards and their communities, because their dollars may or may not be used to support education.
Cox made the same argument in his letter Monday, emphasizing that “when it comes to trust, nothing is more critical or sacred than the way we handle taxpayer dollars.”
“It’s not entirely clear whether these property tax dollars, once they land in the general fund, still carry the restrictions that have always protected them for education use,” Cox wrote. “Without that clarity, future legislatures could easily redirect those funds to other priorities and away from Utah schoolchildren.”
Cox also argued that SB37 added unnecessary accounting and potential legal complications for both school districts and the state.
“Utah has earned a reputation for being one of the best-managed states in the country,” he wrote. “Part of that reputation comes from keeping things simple, clear and transparent. I worry that this bill puts that at risk.”
Cox referenced a letter he received from State Auditor Tina Cannon, which questioned whether SB37 was constitutional.
“If implemented as intended, approximately $700 million would be diverted away from public education for general fund use,” Cannon wrote in the letter, dated March 6. “The Office questions the constitutionality of a law that supplants constitutionally restricted funds at the state level with local restricted funds, resulting in unrestricted state funds for general fund use.”
SB37’s sponsor Sen. Lincoln Fillmore, R-South Jordan, previously argued the bill “establishes a framework to provide additional resources to expanding school districts by redirecting revenue from districts with declining student enrollments.”
“While we are protecting education funding in this bill, it also allows the state the flexibility to be able to make sure that we can adequately fund other priorities like social services, transportation, public safety,” Fillmore said in February.
Last year, lawmakers tried to pass Amendment A, also an effort to free up funds. The Utah Constitution limits the uses of income tax revenue to three areas: public education, higher education, and services for children and individuals with disabilities.
Amendment A would have removed that earmark from the Utah Constitution, allowing the Legislature to use income tax revenue for “other state needs,” but only after meeting the minimum per-student funding requirements.
Lawmakers had hoped voters would decide on Amendment A in last November’s election. However, a judge voided the amendment, ruling the Legislature violated another part of the Utah Constitution — Article XXIII — that requires ballot language be published in newspapers statewide at least two months before an election.
Before ending his letter, Cox made a pointed remark to lawmakers about bill overload — particularly bills aimed at public education.
“I remain concerned about the sheer number of bills introduced and passed each session,” Cox wrote, adding that he “will have more to say about that later this week.”
Lawmakers could override the veto with a two-thirds majority vote in both the House and the Senate.
While the Senate originally cleared the bill with a 20-8 vote on Feb. 20 — meeting that threshold — it fell short in the House, originally passing 41-27, without a two-thirds majority.
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