One of the most difficult challenges for policymakers is divining that fine line between a tax burden that is sufficient to provide necessary services to citizens, and a burden that is too high and drives away businesses and hurts economic viability.
Where that line is located is the subject of many political debates at all levels of government. Liberal individuals and interest groups argue that government should do more to support citizens, sometimes requiring higher taxes. Conservative individuals and interest groups argue that citizens should, for the most part, take care of their own needs and high taxes will hurt the economy.
In Utah, conservative thought flourishes, and the tax burden has declined over the last two decades. The Utah Foundation has noted that state taxes in Utah are the lowest they’ve been in 20 years. The Tax Foundation recently ranked Utah the ninth best state in state business tax climate, and a low 41st in state and local tax collections per capita.
It will always be true that more needs exist than we can take care of with tax dollars. Every program of government could find beneficial uses for more money. But it’s also true that we reach diminishing returns at some point when we’re taxing at such high rates that we take too much money out of the private sector and reduce incentives to work and be productive.
So there’s a fine line. And it’s the job of Congress, legislators, city council members, county commissioners, and education officials to find it.
It’s easy to find states where taxes are too high, hurting economic growth. But sometimes states and local governments can keep taxes too low and hurt legitimate government programs. In Kansas, for example, Gov. Sam Brownback slashed taxes dramatically and has struggled with budget shortfalls, economic challenges, and low approval ratings ever since.
Utah policymakers have been circumspect with taxes, and have mostly found the right balance. It’s very difficult to boost taxes at most any governmental entity in Utah because citizens, for the most part, don’t want higher taxes.
But I believe one area of government – public education – needs more money and a tax increase for education would help Utah’s economy, not hurt it.
Utah’s economic vitality and job growth are among the best in the country. But a big challenge is on the horizon – finding qualified workers for the high-tech jobs of the future. Extremely low taxes are great until businesses can’t find qualified workers. Or until they can’t find customers who have good jobs and can buy their products. Parsimony in education is not good policy for the private sector.
Utah should aspire to be the No. 1 education state in the country. Such status would complement Utah’s economic success, providing the nation’s best workforce – and ensuring a robust economy well into the future.
But Utah won’t become the No. 1 education state with per-pupil spending the lowest in the country. Money isn’t everything in education, but it is important. More money is needed to attract and retain top-quality people in the teaching profession, to provide early education, to provide reasonable class sizes, and to provide career counseling, helping students prepare for the jobs that will exist.
Education reform and school choice is also important. But dramatic improvements won’t be seen without more money.
Utah’s young people can be the state’s greatest asset, or they can be a big liability — if they aren’t prepared for the workplace. They are just as smart as students in states with better educational achievement. Utah’s parents are just as caring. Utah’s teachers are just as committed. But they don’t have the resources that exist in many other states.
Money isn’t the entire solution. But money would help ensure the future of Utah’s young people – and keep Utah’s economy booming.
