Last year, Utahns thought they had a chance to eliminate the state’s portion of the sales tax on groceries — a popular notion that became part of a proposed amendment on the ballot to change how schools are funded.
That failed when a judge voided the amendment for technical reasons.
This year, Gov. Spencer Cox wants to eliminate the state’s tax on Social Security benefits, which would cost roughly the same — about $143.8 million per year.
Of the two, eliminating the Social Security tax is arguably the more popular move. It also makes more sense from a fairness standpoint.
The governor and Lt. Gov. Deidre Henderson presented this proposal to the Deseret News/KSL editorial board this week as part of the proposed budget ahead of the 2025 legislative session that begins next month.
In doing so, the governor also strongly endorsed efforts to reorder what is taught at the state’s universities, expressing his concern that universities nationwide have “forgotten their core mission and become much more in the advocacy business than the seekers of truth.”
Changes to higher education
The education plan deserves careful nuancing. University programs should not be judged solely on outcomes that are measured by jobs obtained or salaries earned. Learning must enlarge a person intellectually, socially and morally, in addition to providing marketable skills.
It makes sense to constantly look at what is being delivered in our schools at every level. Key will be determining who is best equipped to determine what changes, if any, are needed and how best to execute those changes in a politically charged environment. Additionally, Utah’s institutions of higher learning offer different paths and opportunities for their student bodies and any one-size-fits-all approach to cutting or repositioning programs would be counter productive. We hope stakeholders will be able to accomplish what is often missing in Washington, D.C.: healthy rigorous debate, compromise and policies leading to better outcomes for taxpayers, students, faculty and ultimately Utah.
The need to eliminate the tax on Social Security benefits, however, is much more clear cut.
As Utah’s population ages, more people will run headlong into this tax, which makes it harder for elderly people on fixed incomes to make ends meet.
“We had set aside that money, anticipating that the amendment would pass,” Gov. Spencer Cox said, referring to the measure known as Amendment A, which included the food tax. “We’re proposing using that money that we had set aside for that tax cut to eliminate the Social Security tax.”
The elimination of the food tax may come up again, but any redo of Amendment A would have to wait until 2026, at the earliest.
A return to normalcy
Cox said the state’s budget revenue numbers mark a return to normalcy — to the type of modest-growth budgeting the state used to entertain before the stimulus checks, free business loans and other economic uncertainties of the COVID-19 pandemic era.
In some ways, that makes this an unlikely time to cut the tax on Social Security. States typically cut taxes when revenues are in excess. But it’s still a good idea. Revenue estimates show there should be enough money this year to cover the cost. Utah is now one of only nine states that still tax these benefits.
Not all of the governor’s message was about disrupting higher education. His budget includes $2.5 million to expand Utah’s technical colleges and $22 million in performance-based funding to promote higher education initiatives that meet workforce needs.
Problems on campus
But Cox’s feelings about higher education’s core mission align closely with legislative leadership. House Speaker Mike Schultz has raised concerns about the high cost of education, the amount of time needed to graduate, the inability to keep up with demand for some majors and the continuation of some degree programs despite low demand.
Nationally, universities have been criticized for being intolerant of certain political viewpoints. These concerns were highlighted by recent pro-Hamas demonstrations on various campuses and by what the Antidefamation League has termed an alarming surge of antisemitism on college campuses.
Schultz is correct in raising concerns about the costs to students. The answer may lie in creative responses, such as charging different tuition rates depending on the expected salaries earned by graduates, which has been suggested by some, including former Nebraska Sen. Ben Sasse. This might even be a way to attract more students to the teaching profession, solving another perpetual problem.
The governor’s budget also focuses on energy and his desire to build a nuclear reactor in the state — something that would require Washington to relax its stringent and lengthy permitting process. It also includes money for a new veterans’ cemetery.
What it does not do is focus mainly on the need for affordable housing, which was the cornerstone of Cox’s budget last year. However, the governor has been quick to tout progress made in that regard over the past year, as well as his ongoing goal to add 35,000 affordable homes by the end of his second term. Affordable housing remains a priority, he said.
“The bills we passed last year are just being implemented now,” he said. “You’ll see some significant proposals again this year.”
The governor’s annual budget presentation is, of course, not the final word. Once lawmakers convene in January, the give-and-take of competing interests and the hard work of assigning budget priorities will begin in earnest. Cox has presented a good-faith, balanced budget to start that process.
We hope lawmakers, who have demonstrated a determination to continue cutting income tax rates, will at least agree to remove the tax on Social Security before they adjourn in March.
Will be significant bills again this year. “We’ve got to build more.” “The bills that we passed last year are just being implemented now.” Broke ground on new projects. You’ll see some significant proposals again this year.