Utah Capitol 27

There’s a group of leading Utah legislators and members of Gov. Gary Herbert’s administration working to find a compromise with pro-public education and college officials over the state Constitution’s specific earmarking of income tax revenues for public school/college funding.

Public officeholders are staying mum on the group’s make-up and refusing to comment, telling UtahPolicy.com the negotiations are “very sensitive.” However, multiple legislative sources say the group is looking for a way to preserve public education funding without the specific constitutional earmark.

Some ideas under consideration, according to sources with knowledge of the negotiations, would allow more flexibility for local entities such as school boards, cities and counties, to raise property taxes to better fund education. Negotiators are discussing some sort of inflationary index that would tie increases in education funding to the economy. Sources also indicate that the discussions could include new constitutional language guaranteeing a certain percentage of state funding goes to education every year.

UtahPolicy.com/Y2 Analytics polling shows that only 30 percent of Utahns currently favor amending the state Constitution to take away public education’s guaranteed income tax revenue.

Utah is the only state in the nation with such a constitutional requirement, and GOP legislators and Gov. Herbert favor an amendment removing the earmarking, saying state lawmakers need more flexibility in the budgeting process and the ability to move money between the two main funds, the Education Fund (made up of personal and corporate income taxes) and the General Fund (made up mostly of state sales taxes and various fees).

UtahPolicy.com is told that perhaps this week, state leaders may be able to declare such a compromise publicly, but in any case, the working group will continue its negotiations.

Changing the Constitution’s earmarking is a critical, but separate, part of the overall state tax reform structure, now being hammered out by the Tax Reform Task Force. Task force members have declined to debate the constitutional change openly, with task force leaders saying they may take up the issue in a Nov. 21 public meeting.

Several times, the task force members have spoken of the amendment working group, but have added that it is separate from their main job -- writing a tax reform bill in preparation for an early December special session. That reform draft bill will be further debated in the Nov. 21 meeting.

While GOP state leaders would like to consider a constitutional amendment in the special session, they admit that such action could wait until the 2020 general session, which starts at the end of January.

Any constitutional amendment has to pass by two-thirds in both the state House and Senate and then goes before voters for majority approval or rejection; in this case, at the November 2020 ballot.

The draft tax reform bill “has a holding place” for constitutional amendment language, but more likely would be dealt with in a separate resolution.

In any case, hints of a compromise came up in a meeting last week of the Utah State Board of Education, reported here by the Deseret News.

The state board, separately elected from the Legislature and given constitutional authority over public education governance, debated whether to oppose any attempt to remove the earmark language from the Constitution.

But in the end, board members (it’s assumed some are part of the working group) passed language that called for some constitutional guarantee of education funding support.

While vague, the difference is clear: The board may not oppose removing of the specific constitutional earmarks that require all income tax go into the state Education Fund for public and higher education, as long as there is other language in the Constitution (presumably in the earmark removal) that puts education funding superior in legislative budget-setting.

The Y2 polling found that 50 percent of voters oppose changing the constitutionally earmarking for schools and colleges, and 20 percent neither opposed nor supported a change.

With only 30 percent support for the amendment change, GOP leaders and Herbert, without pro-education backing for such a move, face a real political problem with voters at next November’s ballot.

If they can get various groups -- like the independent state board and the UEA, the main teachers union -- to stay neutral on the constitutional change, or in the best case support it -- then their job of selling the amendment to voters is greatly enhanced.

The UEA showed its organizational and political strength in 2007 when it got voters to reject at the ballot box a new private-school voucher law.

And Herbert and GOP legislative leaders clearly don’t want another such showdown over removing the income tax earmark for schools from the Constitution.