Lawmakers, educators still far apart on deal changing Utah’s constitutional earmark for education funding

Talks between legislative leaders and education stakeholders continued over the weekend with little progress.

Time is running out for legislative leaders and Utah’s education community to reach an agreement on a proposed change to the state’s constitutional requirement that income tax revenues can only be used to fund public and higher education and some social services. Talks between the two sides made little progress over the weekend as several deadlines loom.

If passed, SJR10 asks voters to amend the state constitution to remove the earmark that says income taxes can only fund public and higher education and social services for children and the disabled. Everything else in Utah’s budget is funded primarily through sales and gas taxes.

Sen. Dan McCay, R-Riverton, says that earmark has created an imbalance in Utah’s budget.

“Because of the earmark and unforeseen shift in our economy, we’re moving more and more from goods and services to a service-oriented economy. The more we shift to services, the more we’ll see growth in income tax,” McCay said.

Most of the $2 billion in surplus revenue in this year’s budget are from income taxes, which can only fund those specific things. At the same time, lawmakers worry costs for every other state program will soon outpace non-income tax revenue and impact the ability to pay the bills.

Legislators cannot change the constitution by themselves. Instead, they need to put the question to voters in 2024, which could be a dicey proposition if they can’t get the education community on board. Utah spends less on public education per pupil than every other state save Idaho.

For weeks, legislative leaders have been trying to entice educators and other stakeholders to either endorse or at least remain neutral on the change, with promises of more future funding.

As previously reported by The Salt Lake Tribune, lawmakers have proposed language requiring the legislature to maintain a funding framework for public education that includes covering inflationary costs and student enrollment growth instead of getting rid of the budgetary earmark.

That’s similar to the agreement legislators made with the education community in 2020 to get their support for Amendment G, which allowed for the use of income tax money to fund social services for children and disabled Utahns.

Lawmakers have offered to boost per-pupil funding by 6% in the fiscal year 2024 budget, which is about $240 million in new money. Around $139 million, or more than half of that increase, is what lawmakers are already required to do under the deal they struck over Amendment G. Additionally, they have promised to set aside another 2% per-pupil increase, or $82 million if voters approve the constitutional change in 2024.

Legislative leaders also say they will freeze funding for school enrollment at current levels for the next five years. School populations are projected to drop up to 1% annually through 2035. The additional money in the budget will further boost per-pupil funding. That five-year freeze can be extended by lawmakers for another five years when it expires.

None of the major players in the educational community have endorsed the change yet.

On Friday, the Utah State Board of Education endorsed a counter-proposal to lawmakers which would boost per-pupil funding by 10% in FY2024.

“I think we are getting very little for potentially giving up this constitutional guarantee. I believe the money is available,” said USBE member Carol Lear on Friday.

Boosting per pupil funding would cost $410 million, just slightly more than the $400 million tax cut package legislators are poised to approve in the final days of the 2023 session. Money for that tax cut comes at the expense of future revenues that are part of the current constitutional earmark.

The USBE endorsed the proposed change to the Constitution on Friday and voted to send legislative leaders a message that they were “moving in the right direction” with the funding increases.

The Utah Education Association, the state’s largest teachers’ union, said in a news release Monday that, “UEA and other education stakeholder groups oppose the resolution as it is currently written.”

Legislators are moving forward with the plan to put changing the earmark on the 2024 ballot while continuing negotiations with education stakeholders. The resolution must pass the Senate by the end of the day on Tuesday, or the issue is dead this year. The House will have until midnight Friday.

As it is a constitutional change, the measure must pass with a two-thirds majority in both houses. If Monday’s vote in the Senate is any indication, the Republican majority may have trouble securing that level of support, especially if the education community is not on board. The resolution only got the 20 votes it would need for final passage after the Senate Seargent at Arms was dispatched to round up Republican Senators who were not on the floor for the vote.

A final Senate vote is expected sometime Tuesday.

Correction: Feb 28, 2:10 p.m. • This story has been updated to correct the USBE’s position and to add UEA’s recent statement.