By any measure, Utah has the strongest economy in the nation. With an unemployment rate below 2%, a healthy rainy day fund and stellar credit, Utah lawmakers should have plenty of tax revenue to cover all our current needs and invest in our long-term prosperity.
We do but we don’t. Let me explain why.
The state budget totals approximately $25 billion, which includes money that comes from the federal government and two primary state sources: income tax and sales tax. Income tax is constitutionally dedicated to education, while sales tax pays for, well, basically everything else.
Although the education programs funded by the income tax are critical and some of the Legislature’s highest funding priorities, this artificial division in our budget ties our hands and prevents us from getting the most out of every taxpayer dollar.
The problem is twofold. First, income tax revenue is growing twice as fast as sales tax revenue. Second, the growth in sales tax collections is not keeping pace with the critical needs of our growing state. In short, we have enough money to pay for education, including an increase in overall funding. Adding flexibility would also ensure sufficient funds for general fund programs such as water infrastructure and conservation, transportation and transit, mental health services and affordable housing.
But we don’t have the flexibility to put that money to the best use. Utah is the only state in the nation that earmarks all income tax revenue, leaving only one-third of state revenue to fund the rest of our budget.
Legislators work to craft a budget for all state needs with one hand tied behind our backs.
We made a real push to address this recurring issue this session. The House and Senate worked with our partners in the education community to craft a plan to strengthen protections for education funds, stabilize Utah’s budget structure and eliminate the state sales tax on food — a move strongly supported by the public. Ultimately, the time limitations of the 45-day session made it impractical to thoroughly evaluate the impact of the proposed changes.
But the issue isn’t going away.
Don’t mistake this for an effort to divert money from education. With a week remaining in this session, the House plans to increase per-student funding with a 6% increase to the weighted pupil unit and provide funding to give teachers additional support by adding four days of paid preparation time.
In total, education funding will increase by $383 million in ongoing funds this year, the highest dollar amount in at least the past decade. Local school boards and superintendents ultimately decide how the money is spent, but the Legislature has made every effort to ensure teachers receive the resources they need, have the time to prepare impactful instruction and get a well-deserved raise.
Revenue and budget projections clearly indicate an economic trend that will have significant impacts on our ability to appropriately fund critical state needs. The reality is, it already has. Once again, our ability to work together as legislators, education stakeholders and as people who care about our state will be put to the test.
Over the coming months, the Legislature will continue to lead discussions and explore ways we can resolve the issue to best benefit our state. I am optimistic that the “Utah Way” will win out as we chart the “Utah Way Forward.”
Brad Wilson is the Speaker of the Utah House of Representatives