In the frigid morning before the sun rose on Dec. 9, dozens of parents and teachers gathered outside Grand County schools to hold signs and raise awareness of a statewide tax restructuring bill that they fear could negatively impact local students and schools.
“We need to let people know that the teachers and taxpayers in Grand County don’t support this,” said Libby Bailey into a megaphone, before leading people in a chant accompanied by the honks of passing cars.
Bailey is the communications director for the Grand County Education Association, which organized the protest. The group is opposing a far-reaching and controversial plan to reform the state’s tax structure. Utah Governor Gary Herbert called for a special session of the Utah State Legislature on Thursday, Dec. 12, to debate and possibly pass the plan before the regular legislative session, which begins in January.
On Dec. 9, the Utah State Tax Restructuring and Equalization Task Force sent the massive restructuring to the legislature after a 6-3 vote, with one representative who opposed the bill likening it to “kicking the can down the road.”
Among the recommended plan’s measures would be an increase in taxes paid on groceries, gasoline, and some services while making a sweeping cut to the state’s income tax rate. The exact rate change was still being debated ahead of the special session, but estimates released by the Tax Restructuring and Equalization Task Force show potentially 78% of Utah residents would receive a reduction in income taxes under the plan.
However, a substantial portion of Utah’s education funds come directly from income tax revenue so, without a plan to replace the money lost, these changes would cut the amount of funding available for public education, particularly in rural counties like Grand County.
“In Utah, income tax equals education funding,” said Hank Postma, president of the Grand County Education Association, “so essentially the state is trying to push through what amounts to a $580 million cut to the education fund.”
“Right now, there’s no clarity,” said Ryan Anderson, formerly a Grand County High School teacher and now Utah Education Association-Retired vice president. “We’re just hearing legislators promising that they’ll make sure funding will be provided at some unclear future point.”
Without that funding shortfall being addressed by legislators, Anderson said, individual districts could end up feeling the pressure.
“In Moab, imagine our town that’s already dealing with a housing and real estate crisis having to raise property taxes to fund schools,” he said, also pointing out that rural counties like Grand County will be impacted by the increased grocery and gasoline tax more than those up in the Wasatch.
That’s one point on which Albrecht agrees.
“This bill originally came out last year, and I was against it at that time,” said Albrecht to the Moab Sun News, “but I’m a ‘yes’ now after we negotiated some aspects that could hurt rural Utah.”
Albrecht reported that he didn’t “necessarily like” the tax on motor fuel since rural counties don’t have access to trains other modes of transportation. However, he said was pleased that the current version of the bill reduces that tax and reinstates funds for county road work.
Albrecht acknowledged how the income tax cut could potentially impact public education funds, but maintained he felt that the state’s schools are well addressed in the budget and other issues could be resolved in the future.
“There’s been a lot of work that’s gone into this,” said Albrecht, pointing out that the Tax Restructuring and Equalization Task Force held months of town hall meetings around the state to hear from residents. The group held a meeting in Moab on July 20.
“It isn’t perfect, but it’s good enough,” he said, “and no matter how you slice and dice it, this is a substantial tax cut for people in Utah.”
The need for tax reform in the state is generally agreed upon, as explosive population growth and a changing economy alter previously reliable sources of tax and income. Sales tax revenue is projected to decline as more consumers switch from purchasing taxable goods to buying untaxed services. One example of this new economic reality used by the Task Force is the change from purchasing a CD to using a streaming service. This reduction in sales tax income impacts the state’s General Fund, which supports many services from Medicaid to public safety.
To those teachers and parents standing in the cold outside Grand County public schools, that’s a state budget issue that shouldn’t impact students.
“As a parent, I don’t want to pull funding from schools, especially when Utah already has the lowest funding per pupil in the nation,” said Bailey. “And, as a taxpayer, I’m concerned that this bill places the burden of funding schools on already struggling counties who may have to increase property taxes.”
“Our tax system is built on an outdated system and based on outdated funding,” said Anderson, “but that shouldn’t be worked out on the backs of our children.”
Candidates for Utah’s governor post weighed in on the controversial bill as well.
Gov. Herbert has announced he will not seek reelection and formally endorsed his Lieutenant Gov. Spencer Cox. The two men differ when it comes to the tax restructuring bill, however.
In a statement, Cox said that he opposes the current bill and the attempt to pass it in a special session of the Legislature.
“While the Legislature is to be commended for traveling the state and listening over the past six months,” said Cox, “that is different than taking a proposal that was finished four days ago and working to help the public understand and support such significant changes.”
Former governor Jon Huntsman Jr., currently campaigning to regain the title, has publicly opposed the plan’s tax on groceries. As part of a tax reform package he worked on as governor in 2006, Huntsman had opposed placing a sales tax on food entirely.
The full bill and reports can be seen by going online at www.le.utah.gov and searching for the Tax Restructuring and Equalization Task Force.