As proponents of hiking taxes to raise education spending by over $375 million worked at the Capitol to build steam Tuesday, they picked up an important backer: Gov. Gary Herbert, who said he’s supporting an 11th hour compromise to boost school funding.
Under the agreement that was unveiled in the waning hours of the 45-day legislative session, a campaign to raise taxes for schools would drop its ballot initiative and instead raise money through legislatively-passed statewide property taxes and a 10-cent gas tax increase that would require voter approval in November.
A gas tax hike would free up about $110 million that’s now taken from the general fund for roads and, under the proposal, would be redirected to education. Another bill would implement a five-year freeze on a statewide property tax rate – which otherwise is lowered as property values rise to avoid passive tax increases each year. The move is calculated to generate about $126 million annually by the fifth year.
The governor said he liked that lawmakers and the campaign had agreed on the mutual goal of raising education funding, and that voters would get a chance to weigh in on hiking the taxes they pay for at the gas pump. He also applauded the provision that the initiative campaign would abandon its current push to hike sales taxes and the state income tax.
“Very significantly important to me ... this proposal we have on the table here will do no damage to our growing economy,” Herbert told reporters on Tuesday, a day after he said he met with the Our Schools Now leaders about the possible deal. “Our healthy economy really is the goose that’s laying the golden eggs for us.”
The gas tax referral portion of the concept that was released Tuesday afternoon will get its first and likely only public hearing Wednesday at 4:15 p.m.
Rep. Becky Edwards, R-North Salt Lake, who is sponsoring two bills that would put the gas tax question on the ballot, said the proposal is gaining support on Capitol Hill.
Our Schools Now’s “commitment is if we pass these bills, then they’d stand down,” Edwards said.
The late negotiations between lawmakers and the initiative campaign have held up finalization of the state’s roughly $16.7 billion budget while lawmakers scramble to see how much of the state’s money will go to education. The Legislature faces a mandatory deadline of midnight Thursday for adjournment.
If the deal can’t pass the finish line, campaign supporters say they have collected enough signatures to qualify for the November ballot, where they would ask voters to approve a $715 million tax hike for schools.
Sen. Stuart Adams, R-Layton, the Senate’s architect of the proposed compromise, said legislators are still chewing over the plan he worked on with House Majority Leader Brad Wilson, R-Kaysville, and Our Schools Now campaign representatives.
“I’m not sure how my colleagues are looking at it right now,” Adams said. “We have a proposal. It’ll take a little bit of time for them to think about it. We don’t have a lot of time but we’ll see what happens.”
Supporters of the concept view the House as less likely than the Senate to support the framework, which would require suspending rules to make quick work of the package. They were at the Capitol until 11 p.m. Monday and spent much of Tuesday talking one-on-one with legislators as they try to gin up support.
According to draft paperwork that supporters are showing to legislators, school districts and charter schools across Utah would receive about $237 million more annually by 2020 if voters agreed to hike their gas taxes by a dime a gallon in November. Universities and technical colleges would get $42 million more collectively under the plan.
By 2023, Utah will have increased education spending by $376 million a year under the framework, according to the draft documents.
Cities and counties, which receive 30 percent of gas taxes, would also receive about $35.6 million more from the gas tax increase.
Legislators have spent much of the session talking about the drain that building and fixing roads puts on all other services the state budget pays for, to the tune of $600 million annually.
They passed a bill that will make it easier for the Department of Transportation to add tolls statewide, noting the gas tax isn’t as effective as it once was because vehicles are becoming more fuel efficient.
“This is not the final solution for education funding or transportation funding but it’s a great solution for 2018,” Edwards said.
— Reporter Benjamin Wood contributed reporting.