Brad Asay said he was “flabbergasted” and “perplexed” to learn Tuesday that the Utah Senate had voted the night before to allow spending some of the state’s income tax, earmarked exclusively for public education, on services for the poor, the disabled and the elderly.
Legislative leaders had just days earlier abandoned a major sales tax reform effort for the 2019 session, and Asay said he had no indication that a structural change to the Education Fund was under consideration.
“This whole session has been nothing but getting blindsided with things,” said Asay, Utah president of the American Federation of Teachers.
Asay wasn’t the only leader in the education community caught off guard by the proposed constitutional amendment, sponsored by Riverton Republican Sen. Dan McCay and approved by a 21-8 vote. Utah Education Association President Heidi Matthews was unable to comment until Tuesday morning, when she described the move as a “fundamental shift” and “sweeping change” in the way public education is funded by the state.
“Initiating something this big with barely two days left in the session, when there’s no time whatsoever for a committee hearing or public input, is absurd,” Matthews said, “and certainly not good lawmaking practice.”
McCay quietly introduced the proposed amendment shortly before 8 p.m. Monday by swapping out the language of one of his own bills. The move came after a day that saw the House and Senate jockeying over competing budget proposals, and disagreement on how to proceed after the failure of an effort to more equitably balance out the high-growth education fund and the more sluggish general fund through an expansion of sales taxes.
Republican House and Senate leaders announced on Tuesday afternoon that they had struck a deal on the budget that includes most of the spending previously planned. However, because they are using one-time surplus to fund some programs, they believe that will keep pressure on to approve tax reform because the funding isn’t guaranteed to continue into a second year.
Lawmakers plan to continue those tax-reform discussions in the coming weeks and potentially convene in a special session to enact a plan. And McCay said a less-restrictive income tax could be helpful as part of that larger effort.
“At this time this is just a tool in the toolbox,” he said Tuesday. “We are all reluctant to make this change.”
In recent years, lawmakers have pulled general fund dollars out of the state’s higher education budget in order to free up sales tax revenue for other programs. Senate President Stuart Adams, R-Layton, said the proposed constitutional amendment is in keeping with that practice.
“I don’t think that’s our preference, but I think it’s an option,” Adams said. “I think the other option is to try to shore up the general fund.”
The resolution would require a two-thirds vote in the House and ratification by a public vote in 2020 in order to take effect in 2021, well beyond the timeline that lawmakers and Utah Gov. Gary Herbert hope to have addressed the state’s revenue concerns.
Herbert, through a spokesperson, declined to comment Tuesday on SJR3.
Asay said K-12 schools and higher education are already in competition for income tax revenue, an effort that would only become more challenging with the addition of social services.
“It’s a lot like ‘The Hunger Games,’" Asay said. “We’re all running to the cornucopia and as teachers all we have to fight with is pencils.”
Asay said he had spoken with some members of the House who speculated the resolution was a strategic maneuver in the ongoing budget talks between the two chambers. But McCay denied that his resolution was intended as leverage.
“The House and Senate heard from thousands of constituents on [sales tax reform],” McCay said. “One thing that was clear from their input was that nothing should be off the table.”
Sydnee Dickson, state superintendent of public instruction, said the proposal is concerning. Income tax has historically been the state’s funding source for education, she said, and social services has growing monetary needs.
“We were all surprised by it,” she said of McCay’s SJR3.
Dickson also objected to some of the arguments made in support of the resolution on the Senate floor, particularly that Utahns had shown they support health-care programs as much as education by voting in favor of full Medicaid expansion while defeating a gas tax increase intended to indirectly support schools.
“Polling data would show that education is a priority for most Utahns,” Dickson said.
The Utah PTA also questioned the proposal, saying it could further diminish the funds dedicated to education.
“We are troubled that our legislators are seeing the education fund as the easy answer to the tax issues Utah is currently experiencing,” said LeAnn Wood, Utah PTA education commissioner. “We encourage more discussion and hope for solutions that support Utah’s children.”
Matthews, of the UEA, said broadening what the income tax could be spent on would do nothing to address the problems cited during the tax reform debate, which focused on the state’s shrinking sales tax base.
“The Legislature has the ability to fix the broken sales tax structure without cutting public education,” Matthews said. “This proposal is simply a diversion from the real crises: a broken sales tax structure and the chronic underfunding of public education.”
A spokesman for the group Our Schools Now spoke against the amendment on Monday. And on Tuesday, the executive director of the left-leaning Alliance for a Better Utah called the proposal “seriously bad news” and said opening up the education fund would pit students against low-income Utahns with health-care needs in a fight for critically low funding.
“If the Legislature is looking for a quick fix to their sales tax conundrum, we strongly suggest they look elsewhere,” said Better Utah’s Chase Thomas. “Yes, tax restructuring is necessary, but this is not the answer.”
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