Exclusive: Pro-Education Groups Eyeing Tax Hike to Boost School Funding

ClassroomWatch for an announcement soon by a group of powerful – and politically savvy – Utahns who want a 7/8 of 1 percent increase in the state personal and corporate income tax rates for public education.

Whether they will ultimately get that out of the Utah Legislature – or Utahns directly through a citizen initiative petition – is yet to be seen.

While the announcement may come under a new name, basically the group is Education First Utah.

You can read more about Education First’s five-year plan to improve Utah public school education here.

Nolan Karras, former speaker of the Utah House and Republican candidate for governor in 2004, is one of the co-chairs of Education First, along with Jesselie Barlow Anderson. (Jesselie Anderson is the wife of Zions Bank CEO Scott Anderson. Zions Bank is a sponsor of UtahPolicy.)

Karras tells UtahPolicy that the groups are not yet ready to make their announcements. He declined to be specific regarding their plans.

“We are talking to a range of folks” in the community “about some of our ideas, seeking feedback and support,” Karras told UtahPolicy.

However, UtahPolicy has learned from other sources some bare bones:

  • The groups will be putting together some kind of ballot proposition, aimed for November 2018.

Under Utah law, ballot propositions can be a referendum – just asking a question on the ballot, but with no effect of law.

Or folks can run a citizen initiative petition, which would have the effect of law.

  • Lawyers at the state have told UtahPolicy that under the state Constitution, any action the Legislature may take – like raising a tax – could also legally be made by a citizen initiative petition.

So, if lawmakers refuse to act, the group could seek a 7/8 of a percent income tax hike for schools directly from the people.

That assumes, of course, that the 2017 or 2018 Utah Legislatures decline to act on the increased tax revenue plan for public education.

As many Utahns know, the Beehive State ranks last in the nation in per-pupil spending on public schools – which in our case includes traditional K-12 public schools and specialized state-approved charter schools.

Karras tells UtahPolicy that even though GOP Gov. Gary Herbert and the Republican-controlled Legislature have pumped hundreds of millions of new tax dollars into public education in recent years, because of systemic funding issues, Utah stills lags far behind other states’ public school financing.

“We all know that roads have been getting education dollars” in recent state budgets, said Karras, a financial investment counselor in private life who, from his time in the Utah House leadership, understands state financing.

In Utah, the percent of personal income going to fund public education has been dropping, and Utah currently ranks 37th among the 50 states in each individual or family’s income going to fund the local schools, says Karras.

“We are a bunch of business people who are trying to understand how to improve (education) outcomes. We are not education people trying to get more money for ourselves,” notes Karras – referring to in-system education advocates who continually seek increased funding.

“Everyone says look at early education, for example, how effective it is. Look at in-service teacher training – getting teachers to really improve student performance.”

But when his group talks to school district superintendents – advocating for these proven programs – the administrators say they can’t even hire qualified new teachers, or keep good teachers now, adds Karras.

“They want extra money for the WPU” – the Weighted Pupil Unit, the state’s basic education funding building block that just keeps the schools going year to year.

“So how do we do this?” asks Karras. “That is the question we’re working on now.”

But, of course, there are the hard political facts. Just a few:

  • GOP Gov. Gary Herbert was loath to take on any new taxes when he was running for re-election in 2010, 2012 and now in 2016. But Herbert says if he wins this year (very likely), he won’t seek another term.

Thus the governor may support some kind of tax hike for public education in 2017 or 2018 – not having to face voters again.

  • The part-time legislators hate to raise taxes in an election year. That seems to indicate that 2017 is the year to increase the personal, now-flat-rate, income tax.

Perhaps it could be phased in, passed in 2017 or 2018, but not taking effect for a year or two with the rate gradually increasing.

Less of a financial bite, that way.

Legislators increased the state gasoline tax that way two years ago, and with dropping oil prices, the 5-cent-per-gallon hike took effect with hardly any notice from drivers.

Still, Karras points out that it appears at least $1 billion, maybe as much as $1.3 billion, could have been left on the table each year because of the state’s budgeting process combined with tax cuts.

A non-profit research group is now researching that issue, with the hope the shortfall numbers will educate citizens and lawmakers.

Legislative leaders in the House and Senate, both parties, have been told what the group is up to – they don’t want any political surprises, said Karras.

It is likely – with the threat of a citizen initiative or referendum out there – that comparisons with Count My Vote and SB54 will naturally be made.

But Karras said his group doesn’t want that and doesn’t seek that kind of confrontation.

“The beauty of this is that we have 2017, even 2018 if need be, to work with the Legislature,” said Karras. “We’re not looking to threaten anyone. We want to work together.”

But the political fact is: Faced with an initiative, supported by the citizens (public opinion polls show), will legislators give in to the pressure and vote some kind of tax hike rather than have one forced upon them at the ballot box, not crafted as they may like?

As UtahPolicy readers know, the Count My Vote primary candidate petition was well on its way to passage in 2014 when GOP legislators came up with the dual-path-to-party-nomination compromise, SB54.

SB54 resulted in hard feelings, lawsuits, and an internal battle within the Utah Republican Party.

Such divisiveness is hoped to be avoided in the public education funding issue.

Especially to be avoided is the taxpayer revolt – led by what today could be called Tea Partiers – of 1988.

A real political/public relations disaster, that one.

But if Karras’ group can show Utah schools would have had more than $1 billion a year but for previous tax cuts and “reforms,” well, that may go down much easier.

UtahPolicy polls by Dan Jones & Associates show significant support for a direct income tax hike of 7/8 of 1 percent.

In the last survey, published in July, Jones finds that about two-thirds of Utahns would support the 7/8 increase if the money went to their local schools.

But it would not be the first time that lawmakers ignored the wishes of their constituents, as measured in public opinion polls.

Thus the idea, now being discussed, that some kind of citizen referendum or initiative petition would be needed in case lawmakers don’t act.