1. Our tax structure should be fair to lower-income families and avoid taxing them and their children into — or deeper into — poverty.
2. Our system of taxation needs to generate sufficient resources to make the wise upfront investments in our children today that will position them — and our entire state — for success in the future.
Here I will focus on the second of those two priorities and address the key question: Is our current tax system generating the revenues necessary to invest in our children and in the foundations of Utah’s future prosperity?
At the public hearings of the Tax Restructuring and Equalization Task Force, one of the most commonly heard refrains was the declaration that “Utah does not have a revenue problem.” Would that it were so! Alas, the unfortunate truth is that, after many years of tax cutting, Utah finds ourselves unable to keep up with the needs of a fast-growing state.
Separate research reported by the Utah State Tax Commission and by the Utah Foundation has found that the overall Utah “tax burden,” as it is commonly known, is at a multidecade low relative to our incomes.
In many ways, lower taxes are cause for celebration. Everyone likes having more money in our pockets to spend today. Lower taxes sometimes help attract business investment. But taxes are not the only factor for businesses deciding where to locate and expand. Higher on most companies’ wish lists are the questions of whether a state has a suitable workforce and infrastructure to ensure that high-wage (often meaning high-tech) businesses can thrive — both areas where public investment is key.
Let’s begin with education: Utah’s education system is famous for its ability to “do more with less” better than any other state. But are we — and should we be — satisfied with an education system that just performs “respectably,” in the words of one recent report? If we are satisfied with the status quo, that implies we are willing to accept lagging behind not just in terms of inputs but also on several significant outcome measures. For example:
- Our high school graduation rates are lower than national averages for nearly every racial and ethnic category, including our two largest, Whites and Latinos.
- Among millennials (ages 25-34), our percent of college graduates (BA/BS or higher) lags behind national trends.
Moreover, Utah is in the midst of a demographic transformation that is enriching our state immeasurably but also creating majority-minority gaps at a scale that is unprecedented in our history. For example:
- Our gap between White and Latino high school graduation rates is larger than the national gap.
- Education Week reported this month that Utah ranks in the worst 10 states for our growing educational achievement gap between haves and have-nots.
And those concerns are on top of long-standing problems that hold us back from achieving our potential:
- Teacher turnover rates higher than the national average: One study found that the majority of new Utah teachers quit within seven years.
- Pre-K: Utah ranks 36th for our share of lower-income 3- and 4-year-olds attending pre-school.
- Kindergarten: Only a third of Utah kids participate in full-day kindergarten, less than half the national average, because local school districts can’t afford to offer it.
But education is not the only area where Utah suffers from chronic underinvestment of public resources:
- Infrastructure: Utah’s investment has fallen behind by billions of dollars.
- Health care: Our rates of uninsured children are higher than national averages — and rising — especially among the one-in-six of our children who are Latino.
- Mental health and drug treatment: Utah was recently ranked last in the nation for our inability to meet the mental health needs of our communities.
- Affordable housing: This year, the Olene Walker Housing Loan Fund used up most of its annual $14 million allocation at its very first meeting of the fiscal year.
Given the challenges we face and the evidence that tax cuts have taken a toll on our ability to address them, it is worth asking whether the current generation of Utahns is doing our part, as earlier generations did, to set aside sufficient resources every year to invest in our state’s future.
Certainly this is a difficult question, especially for a generation of elected officials — and voters — accustomed to the easy, instantaneous gratification of never-ending tax cuts.
But perhaps now is it time to, as we tell our children, eat our broccoli so that we can grow up to be big and strong.
Matthew Weinstein is state priorities partnership director at Voices for Utah Children.