By any measure, Utah has the strongest economy in the country. With an unemployment rate below 2%, a healthy rainy day fund, and outstanding credit, Utah lawmakers should have plenty of tax revenue to cover all of our current needs and invest in our long-term prosperity.
We do it but we don’t. Let me explain why.
The state budget is about $25 billion, which includes money from the federal government and two main state sources: income tax and sales tax. Income tax is constitutionally dedicated to education, while sales tax pays for, well, basically everything else.
While income tax-funded education programs are essential and are among the top funding priorities of the Legislative Assembly, this artificial division of our budget ties our hands and prevents us from making the most of every taxpayer dollar.
The problem is twofold. First, income tax revenues are growing twice as fast as sales tax revenues. Second, the growth in sales tax collections is not keeping pace with the critical needs of our growing state. In short, we have enough money to pay for education, including an increase in block funding. Adding flexibility would also ensure sufficient funding for general fund programs such as water infrastructure and conservation, transportation and transit, mental health services, and affordable housing.
But we don’t have the flexibility to make the best use of that money. Utah is the only state in the nation that earmarks all income tax revenue, leaving only one-third of state revenue to fund the rest of our budget.
Legislators work to craft a budget for all state needs with one hand tied behind their back.
We have made a real effort to solve this recurring problem during this session. The House and Senate worked with our partners in the education community to develop a plan to strengthen education fund protections, stabilize Utah’s budget structure, and eliminate the Utah sales tax. State on Food – a decision strongly supported by the public. Ultimately, the 45-day session time limits made a thorough assessment of the impact of the proposed changes impossible.
But the problem does not go away.
Don’t confuse this with an effort to divert money from education. With one week remaining in this session, the Chamber plans to increase per-student funding with a 6% increase in the weighted student unit and provide funding to give teachers additional support by adding four days of time. paid preparation.
In total, education funding will increase by $383 million in permanent funds this year, the highest amount in at least the past decade. Local school boards and superintendents ultimately decide how the money is spent, but the Legislative Assembly has done everything possible to ensure that teachers receive the resources they need, have time to prepare a hard-hitting teaching and earn a well-deserved raise.
The revenue and budget projections clearly indicate an economic trend that will have significant impacts on our ability to adequately fund critical state needs. The reality is that it already is. Once again, our ability to work together as legislators, educators, and people who care about our state will be tested.
Over the coming months, the Legislative Assembly will continue to lead discussions and explore ways to resolve the issue in the best way for our state. I have high hopes that the Utah Way will prevail as we chart the Utah Way Forward.
Brad Wilson is the Speaker of the Utah House of Representatives