Should Utah change how it funds education? Lawmakers hope there’s support to amend the Utah Constitution

Time is running out for legislative leaders to strike a deal with education stakeholders, who they hope will support a constitutional amendment on the 2024 ballot.

(Francisco Kjolseth | The Salt Lake Tribune) Cherry trees frame the Utah Capitol on Thursday, Feb. 2, 2023.

Republicans in the Utah Legislature are pushing hard to reach an agreement with education stakeholders on a proposal to overhaul how education is funded in Utah, hoping their latest promise to boost funding for public schools will result in more support for their plan to amend the Utah Constitution.

However, time is running short on this year’s annual lawmaker, and legislative leaders still have to drum up support among their fellow lawmakers.

The latest proposal from lawmakers boosts per-pupil education funding in fiscal year 2024 budget by 6%, or $240 million. They’ll also set aside an additional 2% boost in per-pupil funding that will go into the budget if voters approve the constitutional change in the 2024 election. That’s less than the 10% per-student boost educators asked for, which would cost about $410 million, or a little more than the $400 million tax cut package currently on the table.

Lawmakers are also offering to freeze enrollment funding at current levels for five years. In light of projections showing student populations are shrinking, that freeze would provide even more money for public education. There’s also an option to extend that enrollment funding freeze for an additional five years.

Legislative leaders are hoping that’s enough to get the education community to support, or at least not oppose, amending Utah’s constitutional guarantee for education funding.

Since 1946, Utah’s Constitution has required all income tax revenue to fund public education. That earmark has since been expanded twice to include higher education and social services for children and disabled residents. Everything else in the budget is funded through sales and gasoline taxes. Lawmakers are hoping to expand that constitutional earmark, allowing them to tap income tax revenue to meet other budget priorities.

Their latest proposal prioritizes funding for public and higher education, requiring lawmakers to “maintain a statutory public education funding framework” that’s dependent on revenue growth. Once those requirements are met, they can shift income tax revenue elsewhere.

“They (education stakeholders) get a priority, in a sense, on income tax funds. We’re adding a piece that gives them some guarantee as long as there’s revenue growth,” Sen. Ann Millner, R-Ogden, said Thursday.

Time is rapidly running out for legislators to strike a deal. They’ve told education stakeholders they’d like to wrap up negotiations by Saturday. Talks can’t continue much beyond the weekend, as next Tuesday is the last day the resolution adding the constitutional change to the 2024 ballot can be passed by the Senate or the issue is dead this year.

[Get the latest Utah political news in the new Daily Buzz email newsletter. Sign up here.]

Legislative leaders may need some time to whip up support for the proposal, too. Since the resolution is a change to the constitution, it has to pass both the House and Senate with a two-thirds majority, and there are indications that legislators still need convincing.

“It does not appear that they (the Legislature) are solid on having this passed on their side, either. There were comments made throughout the week that they still have work to do,” Utah State Board of Education member Kristan Norton said Thursday during the board’s meeting.

According to House Majority Leader Mike Schultz, R-Hooper, the current budget framework has caused an imbalance in the budget. In fiscal year 2022, the budget surplus from income taxes was $1.1 billion, while surplus revenue generated by every other source was just $130 million, a nearly 10-1 margin.

“You have revenue sources growing 90% to 10%. We can’t count on a revenue source that grows just 10%,” Schultz says.

Because of the constitutional restriction, those big surpluses generated by income taxes can’t pay for other expenditures, like Great Salt Lake preservation, affordable housing or any pressing needs.

Asking voters to eliminate a guaranteed funding source for public education when Utah has been at or near the bottom in school funding for years could be tricky politically. Convincing public education stakeholders to endorse the plan, or at least remain neutral, would help the effort immensely.

Schultz says the legislature cannot wait until next year to pass legislation removing the constitutional earmark. Revenue estimates released this week suggest Utah’s booming economy may be slowing down, making the current offer to boost education funding unworkable.

“We don’t think we’ll have the revenue available to increase education spending to a level that would get the education community on board. With the numbers we have right now, we feel comfortable we can make that commitment,” Schultz said of this year’s budget projection.

Schultz’s warnings of poverty may not be as potent as he hopes. Lawmakers are finalizing a tax cut package that is paid for with $400 million in future income tax revenue, money could instead be used to boost per-pupil funding by nearly 10%.

Lawmakers are also moving quickly to approve a bill removing the state portion of the sales tax on food, but only if voters approve the constitutional change.

Update: Feb. 23, 6:00 p.m. • This story has been updated to include lawmakers’ latest proposal.