Last Wednesday during Senate floor time, careful listeners received a glimpse into the psyche of the legislative brain that can hold two fundamentally different policy ideas in their head: education funding is the most important issue for any lawmaker, and that tax dollars must be kept as low as possible.
The bill being debated at the time was HB 129 – Amendments to powers, functions, and duties of office of Legislative Fiscal Analyst from Rep Brad Wilson (Republican – Kaysville), a rather long winded bill title for a relativity low key bill. In short, the bill would authorize the creation of a taxpayer website that allows taxpayers to punch in there total taxes and instantly see where their money goes in the state budget. It’s a good bill for government transparency, though we doubt it will receive much traffic.
During the debate, Senator Margaret Dayton (R – Orem) while looking at a pie chart similar to the one a taxpayer would receive on this website, asked if the information could be modified so that “[the taxpayer] could understand that 100 percent of income tax goes to education… I think it is helpful for people to realize that this is a very accurate pie chart but if you just look at your income tax alone, 100 percent of that goes [to education], and I think that will be very helpful for the electorate to understand our serious commitment to education.”
That subtle thirty seconds of dialogue, that took place in a 45 day legislative session, provides powerful insight as to why our schools are underfunded to the point where we are struggling to catch up with Puerto Rico to crack into one of the top 50 when it comes to per-student education funding.
Though we fully acknowledge that the education budget does not solely rely on income tax, one fact that should be emphasized is that though 100% of our income tax “pie” may be going to education, the pie is not as big as some would have you believe.
In fiscal year 2010, the average income tax paid per person was $765, placing in 22nd for collections (or right around the middle) for per capita income tax collection. However, Utah income tax has been on a flat tax system since 2008. In fiscal year 2010, roughly 97 percent of tax returns paid the same or less than under the old system that was phased out in 2005.
Utah, originally, had a progressive tax system, with top wage earners paying 7 percent income tax. The 5 percent flat tax resulted in massive tax cuts that have had a direct negative effect on school funding. Mind you that back in 2005, school funding was still a major issue – the flat tax simply made it worse.
Tax experts saw this coming down the pipe. As the Deseret News reported in January of 2010 “A group of tax experts, in fact, was so upset over the loss of money to the state’s Education Fund — all income taxes go toward funding public and higher education — and what they perceived as unfairness in the new tax that they started a citizen initiative a few years ago aimed at repealing the 5 percent tax and instigating a new, graduated income tax.”
But, according to Senator Dayton, the legislature has made a “serious commitment to education.” This, despite the fact that the pie continues to shrink thanks to legislative taxing policies.
Utah Political Capitol does believe that most legislators care about public education and public education funding… but that they care about it the same way you or I care about donating a dollar to the late night infomercial of your choice. Thus, legislators make choices to fund particular items that they care about, while only providing what amounts to lip service on education funding.
For their part, this year’s state budget does include a 2 percent increase in per pupil spending (if approved). This is a small step in the right direction, but has only come about because Utah, like the rest of the nation, is starting to earn more money again, and still keeps our state at the bottom of the pack nationwide.
As a state, we must explore the politically unpopular idea of raising income taxes to pay for our schools. It is for this reason that we agree, if only peripherally, with Senator Dayton – we hope that by providing this information to the public it is clear that lawmakers have done as much as they are willing to do to fund education. Shifts in budgets and prioritization can only go so far – at some point we as a state simply have to invest more to increase the size of the pie. 100% of a penny is still just a penny.