Utah Capitol 38

A Senate committee advanced a proposed constitutional amendment that would have a far-reaching impact on how income taxes are spent in Utah.

Currently, the state constitution mandates that all income taxes go toward public and higher education. SJR9, if approved by voters in November, would add programs “to support children and to support individuals with a disability” to that funding source. 

Teachers came out against expanding that constitutional funding earmark to include more categories, while the union representing public employees in the state, who are funded by sales taxes, favored the move.

Sen. Dan McCay, R-Riverton, who is sponsoring the measure, says the move would give lawmakers more flexibility in how they set the state’s budget.

“This highlights the ‘hungry hungry hippos’ nature of what goes on with the budget. The ‘haves’ are always happy to have and the ‘have not’s’ are always trying to find more and it’s really tough when you’re trying to balance the budget,” he said.

As UtahPolicy.com first reported, expanding that constitutional set aside to services for children and the disabled could shift up to $600 million of expenses into the Education Fund, giving lawmakers much-needed flexibility in the rest of the budget. Right now, income tax revenue is growing at a faster rate than sales taxes, which is putting a strain on non-education areas of the budget.

Education advocates worry the wording of the proposed amendment is too broad and may lead to unintended consequences.

‘We really don’t know the extent of what that means,” said Dr. Brad Bartles, Executive Director of the Utah Education Association. “It could be tens of millions of dollars in funding, or it could be hundreds of millions of dollars in funding.”

The UEA said the issue was being rushed with less than 10 days left in the 2020 Legislature, suggesting the constitutional change would be better dealt with during a special session later this year.

That suggestion did not sit well with Sen. Curt Bramble, R-Provo, who noted the UEA opposed the tax reform bill that was passed, then later repealed.

“This is being proposed because tax reform didn’t pass, and we still have the same budgetary constraints. It’s easy to criticize and condemn, but what would you do to address the problems of the state?”

A companion bill, HB357 from Rep. Robert Spendlove, R-Sandy, creates an ongoing funding source for schools that will grow with inflation. It also moves the school budget into the constitutionally protected Uniform School Fund, which will block lawmakers from raiding it for other uses.

On Thursday afternoon, the State School Board endorsed both the constitutional amendment and Spendlove’s companion legislation.

McCay says opening up the dedicated income tax fund to other uses besides education may cause some discomfort, but it’s better for the state in the long run.

“The state is like a family. It’s the Legislature’s responsibility to balance the budget and make sure the family has what it needs,” he said.

If the proposed amendment is approved by both the House and Senate with 2/3rds support, it will go to the November ballot.