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2020 Constitutional Amendment G

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The UEA Supports Constitutional Amendment G

Constitutional Amendment G will be on the ballot for all Utah voters in 2020. Here’s the ballot question:

Shall the Utah Constitution be amended to expand the uses of money the state receives from income taxes and intangible property taxes to include supporting children and supporting people with a disability?” 

The UEA supports Constitutional Amendment G because we believe the pros outweigh the cons. Passage of the amendment triggers enactment of two additional pieces of legislation…House Bill 357 and House Bill 5011. These bills statutorily obligate legislators to fund student enrollment growth and inflation each year. They also guarantee a minimum 10% of all new revenue will go toward increasing the WPU for the next few years. This guaranteed funding in code is better than a guaranteed revenue source that has never delivered sufficient funding to keep pace with growing demands.

With or without any type of constitutional revenue guarantee, education funding remains at the will of the legislature. Historically, we’ve had more success increasing education funding by working with the legislature than by opposing them. Should Utahns fail to pass the Amendment, nothing changes for public education funding. (View a history of the constitutional guarantee and tax reform.)

A note of caution…Constitutional Amendment G and the accompanying bills are NOT a solution to Utah’s long-term public education funding problems. We believe the measures put us in a better position for the future than the status quo. However, even with passage the Amendment, we must hold legislators to their promises. It is imperative UEA members remain vigilant, committed and prepared to press the Utah legislature for the public education funding we know our students deserve.

What Amendment G means for public education funding:
  • Changes the Utah constitution to allow income tax to support programs for children and the disabled in addition to public and higher education.
  • Triggers bills that statutorily obligate the legislature to:
    - Annually fund student enrollment growth and inflation;
    - Fund an education stabilization account to protect against economic downturns; and
    - Direct a minimum of 10% of additional new money (after funding growth and inflation) toward increasing the WPU until the target $140.5 million is reached.

Reasons to SUPPORT

Reasons to OPPOSE

Statutorily obligates legislators to fund student enrollment growth and increase education funding annually.

Dilutes the constitutional guarantee directing all income tax revenue to education to include programs for children and disabled.

A guaranteed funding distribution method in code is better than a guaranteed revenue source that never really funded education.

The constitutional guarantee is a promise made by the people of Utah to support the education of future generations.

Provides a safety net to protect education funding during times of economic distress.

Statutory language is easier to change than the constitution…we can’t guarantee what future legislatures will do.

Failure to pass the amendment solves nothing…it simply maintains status quo.

A similar constitutional change in 1996 had a negative effect on public education funding.

The current constitutional guarantee has not delivered sufficient revenue to keep pace with student needs.

Legislators proposed this change because of a shortfall in the General Fund, largely due to growing transportation demands.

With or without a constitutional guarantee, education funding remains at the will of the legislature.

If programs outside education need funding, the legislature should seek revenue sources for those, not rob the Education Fund.

Historically, we’ve had more success increasing education funding by working with the legislature than by opposing them.

Simply a way for the legislature to avoid the real problems of underfunded schools and social services.

The tax reform discussion showed there are ways to move the money out of the Education Fund without changing the constitution.

Pits public education against services for children and people with disabilities, some of the biggest costs in the General Fund.



The Journey…Background on Utah Constitutional Amendment G

Prepared by UEA Director of Research Jay Blain

Constitutional Amendment G will be on the ballot for all Utah voters in 2020. It’s a simple ‘FOR’ or ‘AGAINST’ question, but the answer is anything but simple and the journey there, even less so. Here’s the ballot question:

Shall the Utah Constitution be amended to expand the uses of money the state receives from income taxes and intangible property taxes to include supporting children and supporting people with a disability?” 

For many years, education supporters viewed the constitutional language directing all income tax revenue to fund public education as an important guarantee of revenue for the schoolchildren of Utah. As the legislature began the tax reform process a few years ago, we also began a journey of looking at this guarantee differently.

Guarantee Origins and Changes—

In order to fully comprehend this journey, let’s go back a bit to get some history and background. In 1946 during a special session, the Legislature passed House Joint Resolution 2, which was later ratified by the voters. It said in part, “all revenue received from taxes on income or from taxes on intangible property shall be allocated to the support of the public school system as defined in Article X, Section 2 of this constitution.” This was the origin of the constitutional guarantee allocating all income tax money to Utah’s primary and secondary schools. 

Jumping ahead five decades, the 1996 Legislature passed and voters ratified Senate Joint Resolution 17. This resolution added the higher education system as a recipient of the income tax revenues. The UEA and others in the education community supported the amendment at the time. Over the next 20-plus years, the amount of income tax revenue going to higher education has ebbed and flowed. This flexibility of increasing and reducing the amount of income tax going to higher education enabled the legislature to meet budget demands during cycles of the economy.

Failed ‘Tax Reform’ Legislation #1—

During the late twenty-teens, legislators began an earnest discussion about tax reform. Income tax growth was outpacing growth in the General Fund, causing what legislators described as a “structural imbalance” in Utah revenues. The General Fund receives most of its revenue from the sales and use tax and funds pretty much everything other than education. Early on, much of the discussion centered on correcting the “imbalance” by lowering sales tax rates and expanding the number of products and services to which sales tax is applied. The idea of removing the education constitutional guarantee was also considered, causing alarm among public education supporters.

The public waited for weeks after the start of the 2019 General Legislative Session for a major tax reform bill to be unveiled. Finally, with just under two weeks left in the session, legislative leaders released House Bill 441: Tax Equalization and Reduction Act, sponsored by Rep. Tim Quinn. The bill was very disturbing to many groups, including education supporters. The main idea of the bill was to cut the income tax rate, cut the sales tax rate and to expand the base of the sales tax rate by taxing a lot of services. The thinking was that our economy has shifted from a goods-based economy to a service-based one and therefore, the tax code needed to shift as well. The opposition was swift and overwhelming. After just one committee hearing, the much-anticipated tax reform package was never even heard on the House floor. Too many interests were aligned against it and it had come out too late in the session. Also, many felt it had been crafted with too little input from stakeholders. 

In addition, during the final week of the 2019 session, Senator Dan McCay introduced Senate Joint Resolution 3 that would have expanded the constitutional income tax guarantee to include “services for the poor, disabled, or the elderly.” This resolution passed the Senate but was not heard in the House. Nevertheless, it was a warning to the education community that the constitutional guarantee was on the table as a part of tax reform. 

Failed ‘Tax Reform’ Legislation #2—

Over the summer of 2019, a series of legislative ‘Town Hall’ meetings intensified the tax reform discussion. A Tax Restructuring and Equalization Task Force, commissioned by the 2019 legislature, held these meetings across the state to gather input and present information regarding tax reform. UEA members showed up at every location and clearly told the Tax Force that Utah must have a reliable and growing source of education funding. In the fall of 2019, hearings were held to summarize the informational hearings.

Finally, in December 2019, the legislature held a Special Session and passed Senate Bill 2001. The bill was a watered-down version of the failed House Bill 441 from the General Session, with a greatly reduced number of taxed services. SB2001 included a minor cut to the income tax and a restoration of the sales tax on food. This last item proved to be the bill’s undoing. Citizen groups mobilized around the issue of the food tax and by January 2020, they had gathered enough signatures to place a repeal of SB2001 on the ballot. Seeing the inevitable and realizing it would be impossible to enact a budget with a vote looming, the legislature passed a bill on the first day of the 2020 General Session repealing SB2001.

The Need for UEA Support—

The 2020 General Legislative Session began with little hope at addressing the claimed “structural imbalance” and legislative concerns about shortfalls in the General Fund. The failed tax reform attempts left most members of the legislature reluctant to make significant tax changes without broad public support.

It was in this unlikely environment that Majority Whip Rep. Mike Schultz worked with the UEA and other education stakeholders on a grand education compromise. The compromise consisted of House Bill 357 and Senate Joint Resolution 9. These bills would, in tandem, create a public education distribution method that hadn’t existed before. House Bill 357 would guarantee, if the revenues are available, that student enrollment growth and inflation are always funded. In addition, a Public Education Stabilization Fund would ensure continued education funding in years of budget shortfalls. Senate Joint Resolution 9 opens income tax “to support children and to support individuals with a disability,” the basis for Constitutional Amendment G. 

Legislators realized this plan could not work without the support of the UEA, and they worked hard to earn our support. Ultimately, legislators made changes to the compromise legislation, increased the Weighted Pupil Unit (WPU) by 6%, the largest in more than decade, and funded teacher scholarships. 

Pandemic Changes—

The 2020 General Session ended with a great deal of optimism regarding the future of Utah education funding. Then, everything changed with a global pandemic. A disaster of health and economic conditions threw the economy into uncertainty. Since March, the legislature has met in four Special Sessions, primarily to address health and economic concerns related to the pandemic, with additional sessions likely. 

In the First Special Session of 2020 (the third Special Session for this Legislature), state agencies, including school districts were told to revert to their base budgets for fiscal year 2021, essentially reversing the 6% WPU increase earned during the General Session. In following Special Sessions, some of those cuts were restored, including a 1.8% WPU increase (this remains the nation’s ONLY statewide public education budget increase since the pandemic, primarily due to UEA influence). Also, House Bill 5011, by Representative Mike Schultz, contained a provision to repay, over time, the 6% WPU increase lost from the 2020 General Session. The increase is tied to Constitutional Amendment G passing.

UEA Support for Constitutional Amendment G—

The UEA supports Constitutional Amendment G because we believe the pros outweigh the cons. The changes represent a step forward from the status quo, which has not provided sufficient revenue to keep pace with public education funding needs. With or without a constitutional guarantee, education funding is at the will of the legislature. Historically, we have had more success increasing education funding by working with the legislature than by opposing them.

In addition, during the tax reform process, it became clear there are several methods by which the legislature could move money from the Education Fund to the General Fund without changing the constitution. The compromise represented by Constitutional Amendment G facilitates the same budget flexibility, but with additional education funding guarantees and a significant education funding boost.