Education and Utah’s Economy

Now, more than ever, education is the surest path to economic success – not just for individuals, but also the community.

Education is a multi-billion dollar enterprise that employs more than 148,000 Utahns directly and pays millions of dollars in wages and salaries. Just over one in three Utahns attend or work at a school each day. We all depend on Utah schools and postsecondary institutions to nurture and train children and adults to be productive, law-abiding citizens who vote, volunteer, and contribute to the community and economy.

Over the past several years the Salt Lake Chamber has championed, through Prosperity 2020 (P2020), a business-led movement to advance innovation, investment and accountability in Utah’s education system.

To ensure our state’s workforce stays globally competitive and fuels economic prosperity for generations to come, P2020 established clear goals to advance Utah’s ranking in the National Assessment of Educational Progress (NAEP) reading and math assessments, increase high school graduation rates, as well as advocate for two-thirds of Utahns achieving post-secondary training by 2020.

To meet these goals, business leaders call for the following actions:

  • Innovation—Utilize best-in-class technology to more effectively and efficiently educate Utahns

  • Accountability—Measure performance and hold individuals accountable

  • Investment—Enhance Utah’s education funding effort

Built on these principles, P2020 has created, in collaboration with other organizations in our community, a plan to invest in crucial areas such as educational tools, assessment technologies, elementary and secondary teachers’ as well as college professors’ compensation, and financial assistance for low-income students in order to promote educational attainment for everyone, including at-risk students. This will ensure that Utah is the top state in the nation for attracting investment and nurture growth.

A Worrying Statistic

According to the Utah Foundation: “elementary and secondary education is the largest of all the major state and local government spending categories.”

However, the Utah Foundation has provided additional statistics to more adequately show the discrepancy in education funding: “Utah’s tax burden is at its lowest level in 20 years, about $10 lower per $1,000 of personal income than in 1995, when education funding was at its peak. However, over this same period, public education funding has fallen by $12 per $1,000 of personal income.” Further, Utah Foundation analysis shows that the share of Utahns’ income that funds education has declined since the mid-1990s, from 7th in the nation to 37th.

Where Do We Go From Here?

It is apparent that simply putting more money into education is not the answer. To be successful, any investment must be tied to strategies that significantly improve student achievement, and increased accountability for results.“Prosperity Through Education – The Innovation, Accountability and Investment Plan for Utah’s Future” advocates for both and is critical to our efforts to produce and attract a highly educated, highly skilled workforce that wants to live, work, and thrive with their families in Utah.

Utah voters this fall will actually be able to part of the solution with Constitutional Amendment B and Equalization. If approved, the state will be allowed to implement best practices in investment management to continue building the State School Fund while still balancing our responsibilities to support current and future students.

The state will be able to prudently increase the distribution from the Fund by up to 50% over the next few years while adding millions of dollars to our educational system. The results:

  • The Fund will be better managed

  • Distributions will be grounded in economic principles

  • Local schools will receive more money, both now and in the future

The State School Fund & Governor Herbert

The State School Fund has approximately $2.1 billion in assets. Under Constitutional Amendment B, the amount of money the School LAND Trust Program will receive as “earnings” from the investment of the Fund during the first year the Amendment is implemented is estimated to be $79 million. That amount is $22 million more than the $57 million that the program is estimated to receive from “interest and dividends” alone. The fiscal impact of Constitutional Amendment B will depend on how much of the additional “earnings” that exceed “interest and dividends” is distributed for the support of public schools and how much is retained in the fund. This all would happen without an increase in taxes.  

Additionally, this past legislative session the Governor and legislature strategically invested $440 million in new funding for Utah’s future workforce. This marks more than $2 billion in new money for education over the past six years. Key legislators also made a commitment  to look at increased long-term, stable, education funding to further elevate our educational outcomes.

Overall, the Legislature and Governor Herbert should be commended for their efforts to place a renewed emphasis on investing in Utah’s future workforce. However, as a result of a vibrant economy, many industries are already impacted by a lack of hourly and skilled talent. This pressing labor shortage should also serve as a warning sign to the future constraints on our economy from an under-qualified workforce.

We must regain our former funding effort for education. In the 21st Century, economic opportunity flows to centers of knowledge and innovation, and that in part relies on increased long-term, stable education funding in Utah.