Utah senator wants money for schools — by eliminating family child tax exemption

Published: Friday, Aug. 23 2013 6:26 p.m. MDT

Sen. Pat Jones is preparing a bill that would raise $400 million in new funding for schools by eliminating income tax exemptions for dependents.

Tom Smart, Deseret News

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SALT LAKE CITY — State Sen. Pat Jones, D-Holladay, has an idea to raise $400 million in new, ongoing funding for Utah's public schools — but at the cost of an income tax exemption that benefits large families.

Jones' bill, which is currently being drafted, would not raise the tax rate but would effectively constitute a tax increase by eliminating the tax exemption for dependents. A Utah family of three, for example, would see their annual tax return diminish by around $500, Jones said, depending on their income level and other factors.

She said her bill would keep the effective tax rate below 5 percent but would do away with one of the many exemptions that drive an individual's taxes down, sometimes to the point of paying no state income tax at all.

"If you want a flat tax, this makes it flatter," Jones said.

If passed, the bill would create jobs in education and allow schools to shrink class sizes by hiring new educators, Jones said.

But it would require increasing the tax burden on Utah's families, a proposal that has historically failed to gain traction in a state that prioritizes economic development and supports many large families.

"A $400 million tax hike is going to make it that much less likely that Utah becomes the place where people want to invest their lives and their fortunes," said Royce Van Tassell, vice president of the Utah Taxpayers Association. "We really want to attract people who want to lay down roots, where they have confidence that their investment is going to give them the highest return."

The funding generated by Jones' proposal would bypass the State Office of Education to be distributed at the district level, she said, and would include an equalization mechanism in which 10 percent of the $400 million would be distributed to schools at a flat level independent of size — roughly $45,000 to each school, including charters — with the remaining 90 percent funding schools on a per-pupil basis.

For example, based on enrollment projections for the 2013-2014 school year, East High School in Salt Lake City would receive base funding of $44,610 and an additional $1,243,427. Salt Lake's City Academy would receive $44,610 and an additional $136,489 based on its student population.

Jones said that equalization mechanism would be beneficial to rural schools, which often suffer from a lack of resources, while still providing support for larger student populations.

"I think it’s a fairness and a responsibility for everyone to contribute to the education of our children," she said of the bill.

The need for greater tax equalization around the state has been a frequent topic in the Legislature, including last year when a proposal by Sen. Aaron Osmond, R-South Jordan, failed to gain support and was dubbed a "Robin Hood" bill by Jones for its design of taking money from wealthy districts to give to smaller, rural parts of the state. At the time, Jones said that tax equalization requires new money at the state level, which is consistent with her current proposal.

But Van Tassell said a larger issue is the idea that providing schools with more money will, in and of itself, result in improved student outcomes. He said there is a wealth of research showing that there is little correlation between spending and learning, including in Utah where student performance has stayed relatively flat despite increases in per-pupil funding.

"I think there is an intuitive appeal to the idea that if we spend more money we will get a better education system, and yet the facts simply don’t bear that out," he said. "If you’re going to move the dial on education reform, you can’t simply say, ‘Give us more money.’"

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