As Utah lawmakers race to pass part of a mammoth tax reform effort, an almost forgotten conservative principle is becoming an underlying theme: Earmarked spending is bad.
Utah’s constitution currently requires that all income tax collections go exclusively to public and higher education. And while that may give educators a sense of security, it also ties lawmakers’ hands in ways that keep them from truly doing what they were elected to do, which is to study all the state’s needs and set funding priorities.
Utah’s constitution currently requires that all income tax collections go exclusively to public and higher education. And while that may give educators a sense of security, it also ties lawmakers’ hands in ways that keep them from truly doing what they were elected to do, which is to study all the state’s needs and set funding priorities.
The problem is that income tax receipts are growing faster than sales tax receipts (which also are growing, by the way). This puts the state in a long-term projection of perhaps having to stem the growth of basic state services in times of plenty.
Problems like these always accompany earmarks over time. It’s why Washington is struggling with the runaway growth of Social Security, Medicare, Medicaid and military spending as a share of the total federal budget.
Utah is at a disadvantage in that comparison because it must balance its budget. That’s also a good thing, by the way.
At a policy summit late last summer, House Majority Leader Francis Gibson, R-Mapleton, said he had asked legislative staff to look at what would happen if the state earmarked every last penny of tax collections of every kind only to public education. The answer was that Utah would rise from last place nationally in per pupil spending to 22nd, or roughly the middle of the pack. But, of course, the state has other needs to fund, as well.
In other words, if spending alone is the only answer to educating Utah’s large population of children relative to adults, the state doesn’t have the resources to get much beyond average. Even so, shouldn’t lawmakers look deeply at the state’s education needs each year and allocate funds accordingly?
As part of tax reform, lawmakers are considering whether to ask Utah voters to remove this restriction on income taxes. That might be on ballots next fall.
But before you begin applauding lawmakers for embracing conservative principles, it’s clear they come to this out of necessity, not principle. Removing earmarks from the income tax is the only way to begin evening out how tax money is distributed.
If principles were the driving force, they would get rid of other state earmarks, as well, most notably those for transportation. About a third of the $1.7 billion Utah spends on transportation is on autopilot, thanks to a sales tax earmark.
If the income tax is making it hard to fund state programs, doesn’t this earmark on a chunk of sales tax receipts make it harder, as well? Why shouldn’t transportation also come under yearly scrutiny by budgeters?
The main problem with changing the state income tax earmark is that it precipitates a collision between principle and trust, which is something many Utahns, particularly teachers and school administrators, would rather avoid.
Without the security blanket of the income tax, Utahns must trust their representatives to fund schools adequately. They are promising to do so, but will they?
Questions such as these are always difficult to answer in a state dominated by one political party. If two parties fought equally and vigorously over appropriations, and if lawmakers felt they might be punished by voters for making wrong decisions, political forces would lead to greater accountability.
But the other side of the equation also can be uncomfortable. It is to consider whether education’s funding wishes should always be accepted at face value.
Meanwhile, we are being told that a special session may be necessary this week because, among other things, it includes a 0.29% income tax cut that Utahns should start enjoying in January, and because the state has studied this long enough and waiting for next month’s regular session would bog it down amid a host of other legislative concerns.
This might be true if the entire reform plan were on the table. Instead, Utahns may be getting a cut in the income tax now, which certainly would hurt education, while getting only a promise that the special session will include some other funding source for schools, most likely through property taxes.
That, plus a hope voters will agree to open up the income tax to other state programs next fall — a principled approach about which it’s unclear Utahns will agree.
Problems like these always accompany earmarks over time. It’s why Washington is struggling with the runaway growth of Social Security, Medicare, Medicaid and military spending as a share of the total federal budget.
Utah is at a disadvantage in that comparison because it must balance its budget. That’s also a good thing, by the way.
At a policy summit late last summer, House Majority Leader Francis Gibson, R-Mapleton, said he had asked legislative staff to look at what would happen if the state earmarked every last penny of tax collections of every kind only to public education. The answer was that Utah would rise from last place nationally in per pupil spending to 22nd, or roughly the middle of the pack. But, of course, the state has other needs to fund, as well.
In other words, if spending alone is the only answer to educating Utah’s large population of children relative to adults, the state doesn’t have the resources to get much beyond average. Even so, shouldn’t lawmakers look deeply at the state’s education needs each year and allocate funds accordingly?
As part of tax reform, lawmakers are considering whether to ask Utah voters to remove this restriction on income taxes. That might be on ballots next fall.
But before you begin applauding lawmakers for embracing conservative principles, it’s clear they come to this out of necessity, not principle. Removing earmarks from the income tax is the only way to begin evening out how tax money is distributed.
If principles were the driving force, they would get rid of other state earmarks, as well, most notably those for transportation. About a third of the $1.7 billion Utah spends on transportation is on autopilot, thanks to a sales tax earmark.
If the income tax is making it hard to fund state programs, doesn’t this earmark on a chunk of sales tax receipts make it harder, as well? Why shouldn’t transportation also come under yearly scrutiny by budgeters?
The main problem with changing the state income tax earmark is that it precipitates a collision between principle and trust, which is something many Utahns, particularly teachers and school administrators, would rather avoid.
Without the security blanket of the income tax, Utahns must trust their representatives to fund schools adequately. They are promising to do so, but will they?
Questions such as these are always difficult to answer in a state dominated by one political party. If two parties fought equally and vigorously over appropriations, and if lawmakers felt they might be punished by voters for making wrong decisions, political forces would lead to greater accountability.
But the other side of the equation also can be uncomfortable. It is to consider whether education’s funding wishes should always be accepted at face value.
Meanwhile, we are being told that a special session may be necessary this week because, among other things, it includes a 0.29% income tax cut that Utahns should start enjoying in January, and because the state has studied this long enough and waiting for next month’s regular session would bog it down amid a host of other legislative concerns.
This might be true if the entire reform plan were on the table. Instead, Utahns may be getting a cut in the income tax now, which certainly would hurt education, while getting only a promise that the special session will include some other funding source for schools, most likely through property taxes.
That, plus a hope voters will agree to open up the income tax to other state programs next fall — a principled approach about which it’s unclear Utahns will agree.
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