Utah Citizens’ Counsel Position Statement on Constitutional Amendment Proposal G
September 7, 2020
Constitutional amendment proposal G on the November ballot should be defeated. If passed, this seriously flawed proposal will expand the use of income tax revenues from solely public- and higher-education to noneducational uses “to support children and to support individuals with a disability,” further eroding the state’s half-hearted commitment to education. Moreover, once embedded in the state constitution, any future change will be prohibitively difficult.
In urging voters to pass Constitutional Amendment G, the Utah Legislature has focused on the fact that sales tax revenue has been growing at a slower pace than income tax revenue. The Legislature asserts that education has more income tax revenue than it needs and that some programs funded out of sales tax revenues should be shifted to income tax revenues. For reasons explained below, the constitutional proposal is simply a way for the Legislature to avoid the real problem of both underfunded schools and underfunded social services.
Some Historical Context. The Utah Constitution earmarked 100% of income tax revenue for schools in 1946, after the end of WWII, reflecting voters’ support for establishing public education as the state’s number 1 priority. A modestly progressive income tax with a top rate of 7.75% was adopted in 1975 and lasted until 2005, when a flat 5% rate was instituted during the Huntsman Administration. The public was told that lowering the rate and expanding the base (growing the economy) would raise as much money as previously, but this did not happen, partially because of the 2008-2009 Great Recession. In fact, from 2008 until 2019, school funding did not keep up with pre-recession levels and enrollment growth and inflation.
Starting in 1996, the state limited the amount that local school districts could raise from the state-mandated property tax rate by allowing it to be lowered to keep property taxes from increasing as property values increased. Also, in 1996, voters approved a constitutional amendment that allowed the income tax revenue to be shared with higher education. Joining the two educational systems may have seemed appropriate then, given growth of the higher education budget that had cut into social services funding. The result was supposed to free up dollars needed for social service programs, but instead the savings were allocated primarily to road construction. Neither public education nor higher education has benefitted from the amendment.
Such tax cuts and revenue decisions by the legislature have produced the loss of an average of $1.2 billion per year for public education between 1997-2018. Figures like this make it easy to see why many Utah citizens deduce that the Legislature’s overall goal for public education is just to keep the system running by minimally funding growth and inflation but not to generate significant improvements to match accelerating needs.
The losses in public education revenue are reflected in measures of taxpayer effort, an indication of a state’s commitment to public education. In the early and mid-1990s, Utah was ranked in the nation’s top ten states in the amount of its K-12 operating expenditures as a percent of $1000 of personal income. It is now ranked 39th, affecting how the amount spent per pupil has suffered as a result of the reduced effort. Per-pupil spending is currently a staggering $5000 lower than the national average ($7635 compared to the $12,756).
Shifting income tax money to “support children and support individuals with a disability” could remove up to $600 million dollars a year from money currently available for public and higher education, money that is urgently needed for improved education.
The need for far more money for public education. Hundreds of millions more of tax revenue are still needed for public education. For starters, the need to address the severe teacher recruitment and retention problem is urgent. Envision Utah estimates that the cost of increasing teacher salaries to be competitive for college graduates is alone between $500-600 million annually. Its survey of prospective teachers also found that such salary increases would attract and retain significantly more skilled teachers than would current low salaries combined with the current, relatively attractive benefit package.
In addition, school support services are woefully inadequate, a situation made worse by the social and economic challenges facing students. Several hundred million dollars are required to increase the number of school counselors, social workers, and paraprofessionals to adequate levels—crucially important interventions needed especially by students at risk and that could potentially supplement or reduce the workload of police resource officers. Still more millions are desperately needed to increase the number of school nurses to oversee the multiple and increasing health needs of children in school settings. These funding totals do not even address the cost of additional academic services for at-risk K-12 students, nor the costs of scaling up high-quality preschool, nor pandemic-related curriculum and assessment challenges, nor the value of targeted class size reductions
How much are public education outcomes suffering from these revenue shortfalls? Do we have advantages that offset the severity of the damage? Utah’s parental education levels remain above average compared to the nation—a boon for middle class white students. Helpfully, our poverty levels are also among the lowest in the nation. Our percent of minority students is still comparatively low (although changing rapidly). Given these characteristics of the system that should tend to raise overall state scores, one would expect that Utah’s student achievement would be well above average compared to the rest of the country. And for many years it was. In the mid-1990s our fourth and eighth grade students were consistently ranked in the top 15 states on the National Assessment of Educational Progress (NAEP). By the mid- to late-2000s, however, Utah student rankings had dropped 10-15 places. Utah did see some increases on NAEP scores in 4th and 8th grade reading and math, which is encouraging. Yet, currently, less than 25% of graduating seniors meet ACT composite benchmarks for college readiness in English, reading, math, and science—slightly below the national average. Although it is good news that our high school graduation rate has been increasing and is now at 87.4%, it too lags behind the national average for all ethnic groups, including white, when disaggregated by ethnicity.
Utah now has more than 666,000 K-12 students, 74% non-Hispanic white (the phrase used in the statistics) and 26% minority (17% Hispanic). Among these demographic shifts are increasing numbers of non-English language learners. When performance is disaggregated by ethnic groups, Utah is among the worst 10 states for a growing achievement gap between white students and Hispanic, Native American, African-American students, and children in poverty.
Much of the achievement gap can be attributed not just to language differences between native and non-native English speakers but also to deeper disadvantages that children of color and poor children experience. They are likelier to experience residential segregation and to live near environmental hazards. They have less access than higher-performing groups to health care, nutritious food, and quality early childhood learning experiences. The pandemic has exposed other problems: thousands of at-risk children lack laptops and access to the internet in their homes. Children in low-income and minority families are less likely to succeed without significant and consistent improvement in their life circumstances and opportunities. For this reason, broader social and educational interventions, including targeted early childhood programs and high-quality preschool programs are essential. Such interventions are long-lasting ways to reduce the achievement gap.
The Politics of Proposal G. Proposed Constitutional Amendment G has been promoted to the education community by tying it to an enactment (HB 357) that takes effect only if the amendment passes. It promises to fund annual enrollment growth and inflation increases; moves basic funding from the Education Fund, which is shared with higher education, to the Uniform School Fund, which is protected for public education; allows for expanded use (for operational purposes) of revenue raised through local levies for capital programs; and provides for a protected, additional rainy day fund for education.  The Legislature’s 2020 general session also appropriated a significant 6% funding increase in the weighted pupil unit (WPU–the basic formula for funding K-12 students), $100 million for the additional rainy day (“economic stabilization”) fund for public education, and $100 million in scholarships for prospective teachers. These commitments, however, are and were reversible. Already, because of the pandemic and resulting economic downturn, emergency cutbacks reduced the WPU increase to 1.8% until the economy is restored. Of course, when that will be is uncertain. Although the Legislature, in a pandemic-caused special legislative session, passed a bill that supposedly “guaranteed” future replacement of the lost WPU funds, no statute is a guarantee of anything. Future commitments are unreliable because no legislature can bind a future legislature, which is free to change the statutes (unlike the constitution) at any time.
It is easy to understand why the education community is eager for increased funding. Needs are pressing. Also, the UEA and other education groups understand the value and importance of building and maintaining lines of communication and negotiation with the Legislature. For its part, the Legislature does not like earmarks (although it continues to have hundreds of millions of road construction earmarks) and wants greater flexibility to spend income tax revenue on social services, not just education. In making the case for the amendment, it has singled out services that support children and support individuals with a disability—both groups whose social service and health needs are vital and tug at the heart. The unspoken reality is that if educators do not show willingness to accept expansion of the education earmark, the Legislature can simply cut the income tax rate and reduce the mandated state-property-tax rate, as it did in 2005 and thereafter, thereby denying schools access to needed funds. The amendment puts the education community between the proverbial rock and a hard place.
Digging more deeply into the amendment and its implications reveals additional areas of concern. The Legislature seeks more money for social services, which is a worthy goal. However, rather than increase and reallocate sales tax revenues for social services, it wants to rob Peter (education) to pay Paul (social services). It has lacked the political will to shift hundreds of millions of dollars of road construction from sales tax revenues to user fees, which are dedicated to road construction and other transportation needs. They have also failed to substantially broaden the tax on consumer purchases of services, although such purchases constitute an ever-growing percent of sales compared to the purchase of goods. Taxing more services would allow the sales tax revenue to grow appropriately.
In 2018, the Our Schools Now (OSN) initiative to increase education funding in Utah also lost out. OSN sought a modest 7/8 % increase in the income tax rate to raise about $750 million in new money for public schools. The Legislature objected to the initiative, and some observers think that legislators outmaneuvered OSN. As today’s education community appears willing to do, OSN’s civic leaders compromised with the Legislature. OSN withdrew the initiative in return for promises of about $200-300 million of new spending on public school improvements from existing income tax and promised increases in property tax revenues. The Legislature offered $100 million more if the public voted for a 10-cent increase in the gas tax. Such an increase would have allowed some money for state road construction to be funded from a source other than the sales tax, thereby freeing up sales tax revenue that, through more shifts, could eventually work its way into public education funding. Not surprisingly, the voting public did not trust or understand the convoluted reasoning behind the gas tax increase and voted down the proposal. A serious need to strengthen public education funding by $700 million had been thwarted. We fear a similar result with Constitutional Amendment G.
Conclusion. Looking across Utah’s educational landscape, we see hardworking educators and thousands of eager students, while multiple opportunities to create an excellent system of public education have been missed, lost, misunderstood, and even when recognized, consistently and seriously underfunded. The message is unmistakable. Educationally, Utah has been slipping. Poorly informed and bad education policy that ignores demographic realities has cost the state and its families and children dearly. That is why, come November, UCC urges a “NO” vote on Constitutional Amendment G. Passage is not only unwise but potentially harmful. It is premature, given the failure of the overall tax restructuring plan to which it was linked in 2019, given the inability of the Legislature to come through with its initial promises, and given the ongoing uncertainty of the economy as a result of the pandemic. We hope not to be like Esau in the Old Testament—selling our educational birthright for a mess of pottage. Make no mistake: Quality education takes a financial commitment that we are a long way from reaching. And the future generation depends on it.
 Senate Joint Resolution 9, https://le.utah.gov/~2020/bills/static/SJR009.html.
. Deborah Gatrell, “Utah tax reform should not cut education funds,” Salt Lake Tribune, June 30, 2019,
 The flat rate is somewhat progressive because of credits and exemptions for those at the bottom of the pay scale, but the actual top rate has been only 4.4% because of various deductions/subsidies for high-income earners. Overall, Utah’s income taxes, when combined with property taxes and sales taxes, are regressive; the lowest 20% pay7.5%, middle income groups more than 8%, the top 5% pay 7.3% and the top1% pay 6.7%. Institute on Taxation & Economic Policy (2018), https://itep.sfo2.digitaloceanspaces.com/whopays-ITEP-2018.pdf We note that the 5% rate was lowered to 4.95% in 2018 to offset an expected increase in the federal tax after the Trump Administration’s’ tax reform act of 2017. https://incometax.utah.gov/paying/tax-rates
 Center of Budget and Policy Priorities (CBBP), comparing FY 2008 to FY 2017. Voices for Utah Children reported that Utah ranked 6th worst in the country in the extent of cuts to state formula funding per student since the 2008-2009 recession. CBBP reported increases in Utah formula funding for public education in FY 2019 but reported that the percent change, inflation adjusted, was still 8% below a decade earlier.
 In 2018, as part of its compromise with the Our Schools Now initiative, the Legislature passed HB 293, which set a floor on the state basic rate for 5 years (until July 1, 2023), to keep the rate from being adjusted downward, which had had the effect of keeping revenue neutral as property tax values rose.
 Earmarks to the Transportation Investment Fund have siphoned off sales tax revenue to the tune of hundreds of millions of dollars annually for many years. For an interesting 2015 article on the extent of those earmarks, see Lee Davidson, “Stop road- and water-project earmarks, experts say,” Salt Lake Tribune, November 10, 2015. “Such earmarks provided $461 million this year for state highway and transportation work — gobbling up about 20 percent of all state sales-tax money…” https://archive.sltrib.com/article.php?id=3146948&itype=CMSID
 Utah Foundation, “Getting By with Less: Two Decades of K-12 Education Revenue and Spending,” November 28, 2016. Doug MacDonald, the former chief economist for the Utah State Tax Commission reached the same results even before the Utah Foundation’s research and has extended them through 2018.
 Utah Foundation reported in 2011that Utah ranked 29th in 2010 and was getting worse year by year. By 2014, it was 37th. “Getting By with Less…” In 2018, Fox News reported that, in 1993, Utah spent $51 out of every $1000 of personal income on education but that by 2016 it was down to $34. Max Roth, Fox 13 News, May 21, 2018.
 This figure comes from the Lieutenant Governor’s Office. Among programs currently funded from sales taxes that could be eligible for income tax funding would be state funds in the Children’s Health Insurance Program (CHIP), multiple state programs in the Division of Child and Family Services, the Division for Services to People with Disabilities, the Office for Child Care, the Office of Rehabilitation, and possibly some state Medicaid contributions. Although the Legislature might start by shifting a smaller amount of funds, the potential uses are extremely large, and the Legislature could increase the annual amount over time in a way that could initially mask what is happening.
 “At First Glance: Teachers in Utah,” Utah Education Policy Center (2016), accessed September 1, 2020, https://daqy2hvnfszx3.cloudfront.net/wp-content/uploads/sites/2/2016/08/24134128/uepc_teacher_shortages.pdf
advocates for an average starting salary of $60,000 (growing to $110,00 by retirement) with benefit adjustments. This recommendation was included in the Governor’s Education Excellence Commission budget requests. UEA states that the current average starting salary is $41,000, topping out at $79.000. UEA, “A Long-term Vision for Public Education,” 2019. In 2017-2018, the National Education Association reported that Utah’s average salary was $50,342, the 9th lowest in the country. See Madeline Will, “Which States Have the Highest and Lowest Teacher Salaries?” Education Week, April 30, 2019.
 Utah’s ratio of school counselors to students is 1 for every 648 students; the national average is 1:455. (The national standard is 1:250.) The current ratio of Utah school psychologists is 1:1950 (the national standard is 1:500-700). The ratio for Utah social workers is 1:3000 (the national standard is 1:250). To bring the number of school counselors to half the national optimum ratio of 1:250, that is to 1:500 is estimated to cost around $65 million annually [extrapolated from UEA estimates]. Similarly-significant costs would be needed to recruit more social workers, school psychologists, and paraprofessionals
. The 2018-219 annual report of the Department of Health, “Nursing Services in Utah Public Schools,” approaches the ratio of nurses to schools on a nuanced basis that requires evaluation of student health conditions in local schools rather than adopting a single ratio like that of the American Academy of Pediatrics of 1 to every 750 students (contrasting to Utah’s ratio of 1:3,773). Overall, the Department recommends one registered nurse for each school but allows for deviations depending on the specific health/acuity and social determinants of health (poverty, language barriers, etc.) in given schools that may call for more than one RN in a given school or, conversely, allow an RN to visit up to 5 schools once a week. Overall, the Department of Health concluded that a shortage of 827 nurses existed in Utah schools, a gap that would cost over $78 million to close. http://choosehealth.utah.gov/documents/pdfs/school-nurses/2019_annual_report_8-8-19.pdf
 “Kids Count.” Voices for Utah Children.
 Utah State Board of Education figures show that minorities constituted 4% of K-12 students in 1992, 16% in 2012. In 2018, half of the new students who entered Utah’s public schools were minorities. Of nearly 7500 new students, 4600 were minorities, roughly 61%. Courtney Tanner, “It’s a cultural mosaic: Numbers show Utah’s public schools are becoming more diverse,” Salt Lake Tribune, November 15, 2018. Minorities now comprise a majority of students in the Salt Lake City school district.
 Some critics attribute increases to intensive “teaching to the test” at the expense of the social sciences curricula, and other neglected areas. Others note that Utah students’ sometimes-above-average performance usually disappears when disaggregated by ethnicity. Moreover, it is nothing to feel comfortable about, given that overall U.S. student performance compares unfavorably with student performance in other well-developed countries.
 The National Center of Education Statistics, https://nces.ed.gov/ccd/tables/ACGR_RE_and-characteristics 2017-17. The table shows Utah below the national average in nearly all racial and ethnic categories, including White, Hispanic, and Black. The 1.5 % of Utah’s population that is American Indian was above the national average in the category of American Indian/Alaska Native.
 Utah State Board of Education figures.
 Education Week Sept.2020. Also, see Matthew Weinstein, Voices for Utah Children, “Utah revenues not keeping up with needs,” Salt Lake Tribune, September `15, 2019, 04.
 The initial plan was later amended to a request for a .5% increase in the income tax and .5% in the sales tax, for an estimated $700 Million. Fifteen percent of the new money was also set aside for higher education.
 The Legislative Fiscal Analyst reported that the amount was expected to grow over time.