Large Utah families might soon have to pay more of what some say is their fair share toward schools if a bill that gained early approval Monday becomes law.
SB118 would limit families to two state personal income-tax exemptions, which workers can claim for themselves and their dependents. Now, families may get the exemptions for each child — a situation that has left some Utahns complaining over the years that those with the most children end up paying the least into the school system, which is largely funded through income-tax revenue.
The Senate Education Committee approved the bill 4-2 on Monday, despite criticisms from some that it would mean a tax increase for families.
But bill sponsor Sen. Pat Jones, D-Holladay, said allowing so many deductions has eroded support for Utah schools. Now, some families get so many deductions that they actually end up paying no income tax at all, Jones said.
“In Utah, the way we pay for public education is backward,” Jones said. “Under our current system, the more a family takes advantage of public education, the less a family pays … those that use the public-education system most should share responsibility for paying for it.”
She estimated the bill would mean another $267 million for Utah schools each year. That’s nearly $100 million more than all the new state money put toward education in Utah for this school year.
Decisions on how to spend the money would be made locally and focus on schools’ improvement plans. Jones said elementary schools could get about an additional $300,000 per year, middle schools about $400,000 and high schools $700,000.
She said it would likely cost a family of three about $143 additionally each year.
Laura Pinnock, a mother of four who testified in favor of the bill, said the money could, for one, be used to reduce class sizes.
“My kids are not getting the education that this state should be providing,” Pinnock said of the current funding situation. Utah has the lowest per-pupil spending in the nation.
Others, however, worried about the tax increase it would mean for many families. Royce Van Tassell, vice president of the Utah Taxpayers Association, said it would be one of the largest tax increases the state ever faced.
“I think one of the challenges you inevitably face when funding public education is there is a hope and maybe an expectation that increasing student spending will translate into better outcomes for the students,” Van Tassell said. “Intuitively, that makes sense but there’s very little evidence to support that.”
This is the first time a committee of the Legislature has supported the bill, Jones said.
SB118 was actually one of two funding bills the committee decided to advance Monday.
The committee also voted in favor of SB111, which seeks to help even out funding for school districts across the state. It would do that by freezing a state property tax rate — known as the minimum basic tax rate — allowing more money to be collected as property values rise. Now, that rate decreases as values rise.
The additional money collected would then be distributed to schools.
Bill sponsor Sen. Aaron Osmond, R-South Jordan, estimated that about $12 million could be collected the first year, and as much as $100 million within five years. The fund could be capped at $100 million, Osmond said, giving lawmakers a chance to decide whether to continue the program at that point.
School community councils would decide how to spend the money within certain parameters.
The overall idea would be to help equalize funding for schools across the state. Now, some districts have relatively low property tax rates but collect a lot of money because they are in wealthy areas, whereas others have relatively high rates but collect little money because they’re in poorer areas.
“For a long time now there have been multiple efforts to address that inequity, but we as a Legislature, because of the politics involved related to the winners and losers list, have been unable or unwilling to fix that problem,” Osmond said, referring to proposals in previous years that sought to redistribute money from wealthier districts to poorer ones.
Osmond’s bill passed the committee 5-1 despite complaints similar to those about Jones’ bill, that it would mean a tax increase.
Both bills now head to the Senate floor.