Few things are as surreal as talking to legislative leaders about a potential tax cut and the creation of a new fund dedicated to education growth while, on smartphones around the room, people were watching the economy seemingly catching fire in real time.
At one point during Monday’s daily press availability with state Senate leaders, someone noted the Dow Industrial Average had slipped 2,031 points for the day. It was just a little past noon.
All of which had some in the room wondering why Utah lawmakers seem to be tying a recession-beating education funding scheme to a public vote in November. Why not simply pass it?
At one point during Monday’s daily press availability with state Senate leaders, someone noted the Dow Industrial Average had slipped 2,031 points for the day. It was just a little past noon.
All of which had some in the room wondering why Utah lawmakers seem to be tying a recession-beating education funding scheme to a public vote in November. Why not simply pass it?
Two bills are speeding their way through the final days of the 2020 session, which ends Thursday night. One, SJR9, would amend the Utah Constitution to allow income tax money to be used to fund programs for children and people with disabilities. Constitutional amendments must be approved by a vote of the people.
The other, HB357, would establish a protected account solely for K-12 education, as well as set aside money in an education stabilization fund that would grow from year to year and act as a hedge against enrollment growth, inflation and an economic downturn.
It also would let school districts use property taxes to fund general school operations. Right now, districts can use that money only for construction or renovation of schools or technology programs.
HB357 is being tied to SJR9. In other words, if voters say no to a change in the constitution allowing income taxes to be used on children and people with disabilities, schools won’t get the dedicated fund.
As Monday progressed and the carnage on Wall Street became more evident, especially when added to the carnage from last week, this connection seemed more and more strange.
Maybe a little history is important here.
A year ago, lawmakers sprung a massive tax reform bill on the public with two weeks left in the regular session. The idea was to better protect the state against hard times by correcting an imbalance between fast-growing income tax receipts and much slower growing sales tax receipts.
That effort fell apart quickly when certain service-oriented businesses learned they would be forced to charge sales taxes for the first time. The general feeling was that it was too late in the session to introduce such an ambitious endeavor with so many moving parts.
Lawmakers later passed a different version of tax reform during a December special session, but they were forced to repeal the whole thing when a voter referendum effort gathered enough signatures to put repeal on the November ballot.
People seemed especially upset that the reform measure would have raised the sales tax on groceries.
So, the current revisions to the income tax and changes to education funding are the third try. Only this is a much smaller version. No changes are proposed to the sales tax, other than moving the funding for programs for children and disabled people from the sales tax to the income tax.
Frankly, parts of the new education reserve account make sense, especially as a guarantee against growth and inflation. It might also make some sense to move some social service programs to the income tax. But connecting them does not, no matter how much Majority Assistant Whip Sen. Ann Millner argued it would help tie learning processes and education to the whole child. Not everyone to benefit from this new funding scheme would be a child.
Most education-related groups, with the notable exception of the Utah Education Association, had endorsed these bills as of Monday afternoon. But clearly, this is another huge change in operations sprung on the public, once again, late in a legislative session.
Right now, looking through a telescope from mid-March, it’s difficult to see November clearly. The current market downturn might be a temporary reaction to a coronavirus outbreak that could be ancient history by then. Or perhaps the drop in oil prices is a signal of something larger. Maybe, in any event, concerns about the virus will hurt tourism and conventions enough in Utah to be felt in reduced tax receipts by Election Day.
If so, education might be facing a funding problem, as well.
Legislative leaders have made a point during this session of saying tax reform won’t really be needed until the economy goes bad. That moment might be at hand.
Why not set up a dedicated account to protect the growing needs of education and give districts more leeway with property taxes now, then let voters have a say on opening income taxes to programs for children and the disabled in November?
The other, HB357, would establish a protected account solely for K-12 education, as well as set aside money in an education stabilization fund that would grow from year to year and act as a hedge against enrollment growth, inflation and an economic downturn.
It also would let school districts use property taxes to fund general school operations. Right now, districts can use that money only for construction or renovation of schools or technology programs.
HB357 is being tied to SJR9. In other words, if voters say no to a change in the constitution allowing income taxes to be used on children and people with disabilities, schools won’t get the dedicated fund.
As Monday progressed and the carnage on Wall Street became more evident, especially when added to the carnage from last week, this connection seemed more and more strange.
Maybe a little history is important here.
A year ago, lawmakers sprung a massive tax reform bill on the public with two weeks left in the regular session. The idea was to better protect the state against hard times by correcting an imbalance between fast-growing income tax receipts and much slower growing sales tax receipts.
That effort fell apart quickly when certain service-oriented businesses learned they would be forced to charge sales taxes for the first time. The general feeling was that it was too late in the session to introduce such an ambitious endeavor with so many moving parts.
Lawmakers later passed a different version of tax reform during a December special session, but they were forced to repeal the whole thing when a voter referendum effort gathered enough signatures to put repeal on the November ballot.
People seemed especially upset that the reform measure would have raised the sales tax on groceries.
So, the current revisions to the income tax and changes to education funding are the third try. Only this is a much smaller version. No changes are proposed to the sales tax, other than moving the funding for programs for children and disabled people from the sales tax to the income tax.
Frankly, parts of the new education reserve account make sense, especially as a guarantee against growth and inflation. It might also make some sense to move some social service programs to the income tax. But connecting them does not, no matter how much Majority Assistant Whip Sen. Ann Millner argued it would help tie learning processes and education to the whole child. Not everyone to benefit from this new funding scheme would be a child.
Most education-related groups, with the notable exception of the Utah Education Association, had endorsed these bills as of Monday afternoon. But clearly, this is another huge change in operations sprung on the public, once again, late in a legislative session.
Right now, looking through a telescope from mid-March, it’s difficult to see November clearly. The current market downturn might be a temporary reaction to a coronavirus outbreak that could be ancient history by then. Or perhaps the drop in oil prices is a signal of something larger. Maybe, in any event, concerns about the virus will hurt tourism and conventions enough in Utah to be felt in reduced tax receipts by Election Day.
If so, education might be facing a funding problem, as well.
Legislative leaders have made a point during this session of saying tax reform won’t really be needed until the economy goes bad. That moment might be at hand.
Why not set up a dedicated account to protect the growing needs of education and give districts more leeway with property taxes now, then let voters have a say on opening income taxes to programs for children and the disabled in November?
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