I believe it’s time that we changed the direction. It’s time that we looked at some new ways to fund our public education system long term. —Sen. Pat Jones, D-Holladay
SALT LAKE CITY — A pair of bills that would increase funding for schools by charging Utah families more in taxes are heading to the Senate after clearing a committee hearing Monday.
Jones' bill would generate more than $250 million annually by allowing only two personal or dependent income tax deductions per family.
Osmond's bill could raise as much as $100 million over several years while addressing funding inequities between schools and districts by freezing the basic property tax rate.
While presenting her bill, Jones said every dollar offered as a tax deduction shifts the burden of paying for education and erodes the amount of tax revenue available for schools.
"In Utah, the way we pay for public education is backwards," she said. "The more a family takes advantage of public education, the less a family pays."
Jones said the changes in SB118 are estimated to cost the average family of three an additional $143 in income taxes per year, or roughly $12 each month. That tax revenue would be allocated on both a per-school and per-student basis, generating roughly $300,000 for each elementary school, $400,000 for each junior high and middle school, and $700,000 for each high school.
"I believe it’s time that we changed the direction," Jones said. "It’s time that we looked at some new ways to fund our public education system long term."
Jeremy Montague, an Ogden father of two "with a third on the way," said he supports Jones' bill. He said Utah's per-pupil spending, which is the lowest in the nation, has begun to have an effect on his children's education.
"We're not doing more with less anymore, and something needs to happen," Montague said.
When asked about the effect the tax reform would have on his family finances, Montague said the limited number of deductions would likely impact the rebate he gets at the end of the year, rather than his regular paycheck.
"It's something that I don't expect every year," he said of a tax rebate. "I live off of what I bring home."
Alean Hunt, a mother of six, said she's concerned about how the money generated by Jones' bill would be managed at the local level by school community councils. She said that even in the most involved communities, it's hard to get people to serve in those positions, and there's relatively little turnover.
Hunt said she would prefer the bill include some direction for how the money can be used, such as class-size reduction or teacher aides, rather than be potentially subject to pet projects by a local administrator or parent.
"I think we have to have some set of guidelines," she said. "I would like to see that change."
Despite those concerns, Hunt said she supports the bill. With six children, her family is larger than the Utah average and would see a greater increase in their taxes than most as a result of the bill. But Hunt said it's fair for families to contribute to the public education system they benefit from.
"I had those children," she said. "Who did I expect would pay for their education?"
Jones acknowledged the concern that local communities councils are ill-equipped to handle a sudden influx of significant funding. But she said the bill includes training for council members and added that she believes the ability to oversee significant funding would lead to qualified candidates seeking local council seats.
Jones also said the bill includes provisions that would halt a school's funding under the bill if yearly performance standards are not met.
"This would fund the training so (community council members) know what is in fact out there and how to use those resources in the most efficient way possible," she said.
Funds generated by Osmond's bill would similarly be overseen by local community councils. But a portion of the new revenues would first be given to school boards at the district level to distributed to schools based on need or targeted interventions.
Osmond said his bill is estimated to generate $12 million in its first year of implementation and grow up to $100 million in five years as property values increase. The fund would be capped at $100 million, he said, but would help mitigate the disparity between so-called "rich" and "poor" school districts.
"It puts us on a path, over multiple years, to equalize the property tax revenues," Osmond said.
The Utah Education Association has not yet taken an official position on either bill, but UEA President Sharon Gallagher-Fishbaugh on Monday said she's encouraged that lawmakers are looking at ways to address the issue of long-term funding for schools.
On Jones' bill specifically, Gallagher-Fishbaugh said the proposal to limit income tax deductions is a fair taxation bill that represents "a significant step in the right direction."
"I think everybody has a responsibility to public education," she said. "We have a responsibility to the greater good of society, and a well-educated society translates to a strong economy. It translates to job increase. It translates across the board to a better level of living."
While both bills secured the requisite majority to advance out of committee, each bill received some opposition. In both cases, lawmakers questioned the effect that the increased tax burdens would have on low-income families.
During public comment, Royce Van Tassell, vice president of the Utah Taxpayers Association, said discussion of tax increases are often based on the hope or expectation that increasing per-pupil spending will automatically result in greater student achievement.
Van Tassell said there is little evidence to support that belief. Instead, years of increased funding show that test scores and other indicators have remained relatively static.
"How can we spend the education dollars we have in a way that drives higher education achievement?" he asked.
But Jones responded that during that same period of time, tens of thousands of new students have been added to Utah's student population. Utah's population has also grown increasingly diverse, with more students learning English as a second language or coming from homes that are economically disadvantaged.
Gallagher-Fishbaugh said one of the challenges facing public education in Utah is the growing difficulty to attract and retain quality educators. She said the bills debated by lawmakers often focus on filling schools with technology or altering the minutiae of school operations while the teaching workforce continues to take financial hits that hurt morale.
"None of us went into education to become millionaires, or to even be independently wealthy, or even on the upper end of the scale," Gallagher-Fishbaugh said. "But we did look at being able to provide for our families and be able to see pay commensurate with other professions of similar caliber and education."
Compounding the issue of school funding is the growing cost related to social security and retirement that school districts are obligated to pay.
In 2013, lawmakers approved a 2 percent increase to the weighted pupil unit, which translated to roughly $50 million in additional per-pupil spending. But relatively few of those new dollars were left after obligations were met.
This year, Gov. Gary Herbert has called for a 2.5 percent increase in per-pupil spending, but Gallagher-Fishbaugh says that figure would similarly provide little funding for investment in schools.
"Anything less than a 2.7 percent increase on the WPU this year will result in nothing for us — nothing — because there are obligations the districts have," she said.
Gallagher-Fishbaugh said she recognizes the effect the bills would have on Utah families, but she reiterated that all Utahns, including those without children in public schools, benefit from a quality education system.
"I certainly don’t believe people should be penalized for having children," she said. "But I do believe a fair tax base needs to be provided for everyone to pay into the system at the same rate."
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