Legislators, Teachers reach agreement on massive education funding compromise, but tax cuts are probably dead this year

Utah Capitol 12

Legislative leaders and representatives from the Utah Education Association have reached an agreement on a huge proposal to change funding for public schools in Utah. The agreement will be unveiled in a news conference later this afternoon UtahPolicy.com has learned. However, a proposed cut to taxes on Social Security income is probably not going to happen this year.

Lawmakers have agreed to boost funding for the Weighted Pupil Unit, the basic unit of funding for public schools in Utah, by 6 percent. That translates into nearly $200 million in new funding for schools. The UEA, State School Board and other education groups were asking for the 6 percent increase before the session. Getting lawmakers to agree to that request can only be seen as a big win for education groups.

Sources tell UtahPolicy.com that talks leading to the last-minute agreement accelerated when Gov. Gary Herbert got involved. Sources in the governor’s office confirm Herbert met with stakeholders on Tuesday to discuss the possible agreement.

Unless state senators can be convinced that Utah’s economy won’t tank because of the coronavirus — and that’s a big “if” — it appears there won’t be a small tax cut before lawmakers adjourn at midnight Thursday.

First the tax cuts.

Or, rather, the not tax cuts.

Sources in GOP leadership told UtahPolicy.com Wednesday morning that with the coronavirus coming to Utah — even only slightly up until now — will likely harm the state’s tourism tax take and make current revenue estimates uncertain, and so the tax cut likely isn’t coming. At least not now.

And, accordingly, along with falling international oil prices — which will hit the state’s Uintah Basin economy hard — it is just too dangerous fiscally to cut taxes on low-to-middle income Social Security recipients’ paychecks.

“We can’t spend money we may not have,” said one member of leadership who asked they not be identified.

There is support for such a tax cut in the House, which has already passed Rep. Walter Brooks’ HB181 and sent it to the Senate.

But fiscal conservative senators were not budging Wednesday morning.

“Things could change,” said one House Republican. “But as of now, I don’t see it” passing the Senate.

Meanwhile, as first reported by UtahPolicy.com, the deal to bring the UEA on board with a massive and complicated education funding compromise appeal has landed, as one official put it.

A 2 p.m. press conference Wednesday will announce the deal officially. But in the morning GOP Gov. Gary Herbert was seen coming out of House GOP leadership offices all smiles.

These last two deals — no tax cut and agreement on education funding changes — are the final major issues facing legislators before they leave the Capitol on Thursday, completing what has been a topsy-turvy session that started with repeal of the massive tax reform package passed just last December in a special session.

Lawmakers’ work for this year is not done, by any means.

Sen. Jerry Stevenson, R-Layton, the Senate’s budget chair, believes legislators will be back in a special session at some point to “rebalance” the $20 billion 2020-2021 fiscal year budget, which starts July 1, because of dropping revenues caused by the virus.

Wednesday morning, Rep. Paul Ray, R-Clearfield, House chair of the joint Social Services budget committee, got permission from the body to open a bill — which will quickly be passed — that sets up a special $16 million coronavirus-fighting fund, which will be spent as state and county health officials see the need.