Deborah Gatrell: Utah lawmakers put a destructive frame around tax reform

(Illustration by Christopher Cherrington | The Salt Lake Tribune) Historically, all income tax revenue in Utah has been spent on education. Recent tax reform efforts are challenging that idea.

Last October, a painting titled “Girl with Balloon” by the famous mystery-artist Banksy was sold at auction in London. As soon as the auctioneer accepted the sale, at $1.4 million, a shredder embedded in the picture frame powered up and shredded the painting.

Many arguments by Utah’s legislators supporting tax reform paint a pretty picture, but their framing is destructive.

At each tax reform town hall, task force members framed the problem in terms of revenue allocation, suggesting that simply removing allocation restrictions will solve the “problem,” to wit:

“The ways Utah has funded the state budget in the past no longer meet today’s needs. Currently, the state budget receives revenue from four sources in the form of taxes – income tax, sales tax, property tax and gas tax. Each revenue source allocates funds to a very specific area of government services. In the past, this siloed structure worked fine. Today, there’s an imbalance of designated money coming in and allocated money going out, causing a revenue imbalance and future funding instability.”

This explanation was paired with a fancy graphic showing Income tax (education fund money) looking rather bloated compared with a shrinking and collapsing gas tax (transportation fund). The inference is obvious: Take from the rich (school children) and give to the poor (roads).

The irony is that Utah has a persistent revenue problem in education. Yes, we do have large family sizes and still get middling results with lowest-in-the-nation per-pupil spending. But Utah’s funding effort for education (amount spent on education per $1,000 personal income) also fell dramatically - from 7th in the nation to 37th - in the past two decades.

At some point, Utah’s leaders should acknowledge the free market is working. Teachers used to accept lower pay for what once guaranteed stability, respect and decent benefits. Today, teachers enter a profession with pay slipping further, slashed benefits, diminished respect, and stability under threat. We still have incredibly large classes and student needs are increasing, demanding more unpaid overtime.

Put it together and there’s not actually a “teacher shortage.” Instead, Utah’s teaching force is engaged in a slow-motion walk out, voting with their feet as they leave classrooms for better pay and working conditions in other fields. It’s a major problem because “effective teachers are the most important factor contributing to student achievement.

Who will replace these teachers?

University preparation programs aren’t recruiting enough teachers to replace retirees. Those who enter education programs aren’t always top-tier candidates. We’ve lowered standards to enter the profession, creating a vicious cycle of higher turnover for new teachers coupled with burnout in our veteran teachers who support new teachers year after year while managing their own teaching loads.

Today the economy is booming, and long-promised growth in the education fund (income tax) is suddenly a crisis to be reallocated.

It’s not enough to simply throw money at education, but we do need smart investments like those outlined in Prosperity 2020. If we don’t figure out how to fund the support networks necessary to retain effective teachers and improve student learning, we’re shredding Utah’s future prosperity.

So how should we restructure Utah taxes?

  1. Amend Truth-in-Taxation laws to index local property tax levy revenues to inflation. This would eliminate unnecessary Truth-in-Taxation hearings and keep school district revenues stable, as adjusted for inflation — helping fund education at the local level.

  2. Broaden the sales tax base for discretionary purchases. Not water. Not legal or medical services. Streaming movies and music services should be taxed. Let’s also see what revenue results from online sales under the new law.

  3. Repeal the sales tax on goods that qualify for SNAP and WIC. This would be a boon for the working poor who don’t benefit much from across the board tax cuts.

  4. If we must cut the income tax, eliminate income tax on Social Security and military retirement benefits. This helps seniors on fixed incomes and encourages military retirees, who usually pay income tax on second-career earnings, to stay in Utah.

These adjustments would achieve the stated goal of broadening the base while lowering rates, help the folks who would benefit most, and strengthen local education funding.

Deborah Gatrell

Deborah Gatrell is a National Board Certified Teacher in Granite School District and a Utah Teacher Fellow alumni. The Utah Teacher Fellows are actively working to increase educator voice in education policy. You can follow Deborah on Twitter @DeborahGatrell1 and the Fellows @HSG_UT. Learn more on their blog, The Utah Teacher.