In response to a strong economy and growing tax revenues, recent state budgets have increased education funding at a pace not seen in years. This is welcome news after 10 years of steadily declining education funding effort. By funding effort, I mean public education revenues per $1,000 of personal income, as shown in a report released by Utah Foundation this week.

Most Utahns know that Utah ranks lowest in the nation for school funding per pupil. But until the mid-1990s, Utahns used to be able to say that at least we were trying our hardest to fund an adequate education system, because we spent more of our incomes on education than nearly every other state. As a society that has always valued children (and lots of them!), we were willing to shoulder a high burden for funding schools, and we placed education at the top of our priority list for spending tax dollars.

That changed after 1996, when voters amended the state constitution to allow income taxes to be shared with higher education rather than remaining solely dedicated to K-12 schools. This was thought to be a good idea to allow the colleges and universities to share in the rapidly growing income tax. But in practice, higher education never really benefited from the change. As income tax dollars were added to the higher education budget, other funds were taken away in direct proportion. This allowed the expansion of other programs, which became a higher priority for funding growth.

As a result of the loosened earmarking of income taxes, education funding grew slower than Utah's economy, and our once highly ranked education funding effort slipped to just below the national average. As the funding effort fell, the distance between Utah's per-pupil spending and other states widened. The latest national figures (from 2005) show Utah spending $1,000 less per pupil than the next-to-last ranked state. In 1995, Utah was about $300 below the next-ranked state.

Why does this matter? Because states are in competition with each other for quality jobs, and one prominent way to compete is to tout the strength of the state's workforce. These widening gaps in education funding between Utah and other states can harm our economic competitiveness. We used to hear more bragging about Utah's well-educated workforce, with impressive statistics about the high number of college graduates. Utah once was in the top 10 states for the percent of adults with college degrees. We've slipped from that position, especially with our younger population, which is now well below the national average for educational attainment. Could it be that deficiencies in our public education funding weakened the ability of our young adults to succeed in college?

After all that, there is good news; for the past two years, the Legislature has begun to turn around this trend in education funding effort. Public education is now receiving around $700 million more than it did two years ago. This adds up to more than $1,200 per pupil, and depending on what other states are doing, it might actually lead to a bump in the rankings for Utah. A lot can be done to improve education with $1,200 more per pupil. In a classroom of 25 students, that's another $30,000 that can be spent on quality curriculum, making teacher salaries more competitive to retain teachers who are in short supply, implementing new technology to improve learning or any of a host of improvements. This is good news for Utah's economic competitiveness. We're off to an excellent start in making up for the lean years of the past decade.

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Stephen Kroes is president of Utah Foundation, an independent, nonprofit public policy research organization.