Poverty

Reimagining James Madison Elementary

Ogden School District is a beautiful and vibrant community filled with dedicated leaders who aim to ensure it is a place where all its students can thrive. 

While the Ogden area faces notable challenges, it is also a community of resilience and opportunity. According to Utah's Annual Intergenerational Poverty Report, two of Ogden’s zip codes experience some of the highest rates of children in intergenerational poverty [1]. The district also serves a vibrant and diverse population, with 50% students of color, a 21.2% mobility rate, and a 22.5% English learner population [2].

These factors provide the Ogden School District with unique opportunities to innovate and create meaningful change. With the closure of James Madison Elementary, the district and its partners can reimagine the school's use not only to help meet the needs of its students but also to enrich their experiences. 

Through research, in-depth conversations, and strategic meetings, the Ogden School District, the Ogden School Foundation, and Voices for Utah Children have advanced plans to launch a community center for K-12 children and families in the Ogden School District. 

Our Four Key Priorities

Our goal is to create a community center that meets the unique needs of the Ogden community, strengthen the district's current partners, and provide families the opportunity to thrive.

To achieve this goal, we have established four key priority areas that our efforts will focus on addressing the community's needs. Each priority area will partner with relevant community partners to bring resources, information, and services into the building. Additionally, each priority area is developing proposals that showcase the current capacity, needs, assets, partners, and plans over the coming years as this initiative moves forward.

Who We Are

We are a diverse group of stakeholders coming together to inform the development of the community center and ensure that the local community's needs and assets are met and considered.

Partner with Us!

There is growing excitement within Ogden about ensuring the success of this initiative and providing adequate funding for the different programs and projects. Currently, we are looking for additional partners to support the building redevelopment, technological support, and official launch.

To discuss partnering with this initiative contact Moe Hickey at

Sources

[1] https://jobs.utah.gov/edo/intergenerational/igp24.pdf 

[2] https://www.ogdenschoolfoundation.org/who-we-are/at-a-glance

Most of us don't enjoy paying taxes. We do it, though, because pooling our money together through taxes makes it possible for us to have roads, schools, libraries and parks, fire fighters and law enforcement, and so many more public goods that none of us could afford on our own. 

Tax policy (the ways we choose to collect taxes) impacts everyone, and often in many different ways. You may have very recently paid sales tax on your groceries, gas tax at the pump, property taxes on your home or through your rent, and of course, income tax on the money you earn.

From state to state, tax policy is unique; no two states collect taxes the same way. Tax policy also changes a lot over time. Different types of taxes affect people differently, depending on whether they have higher or lower incomes. 

Some tax policies and structures promote fairness and equity. Other approaches to taxes contribute to social inequality. When tax policies burden lower-income people more than very wealthy people, who can more easily afford to pay higher taxes, we consider that unfair.  Sometimes those kinds of tax policies are called "regressive." 

States with the most unfair tax structures typically have:

• have no or little income tax,
• have no refundable tax credits, and 
• rely on high sales and excise* taxes.

How Fair is Utah's Tax Structure? 

Analysis by the Institute on Taxation and Economic Policy (ITEP) shows that in Utah, low- and middle-income families pay more of their income in taxes than the wealthiest households. 

We judge Utah's tax fairness holistically, by looking at all the taxes that are paid by families at different income levels. This is the "effective tax rate," or the share of overall household income a family spends on income, sales/excise and property taxes in a year. The table below shows the effective tax rate of Utah households, depending on how much income they earn each year. 

In Utah, 20% of families make less than $23,000 per year. These families pay approximately 7.5% of their total income in state and local taxes. By comparison, the top 1% of Utah families - which are earning more than $487,000 per year - pay an effective tax rate of only 6.6%. 

But the Utah families who pay the most in taxes are those in the middle. Middle-income households (making between $40,000 and $104,000 per year) have an effective income tax rate from 8.1% to 8.8% - the highest effective tax rate of all income levels. 

Towards Fairness: Tax Credits that Actually Work for Working Families

One way to make our state tax structure more fair is through carefully constructed income tax credits. When tax credits cut out families that pay less in income tax - like our non-refundable Earned Income and Child Tax Credits - then the families who are struggling most, benefit the least. Some legislators argue that families who don't pay as much income tax don't "deserve" to fully benefit from tax credits. But those families clearly pay more in overall taxes than any other income group.  

Babies don't pay any taxes - but the households they live in do. Working families with young children deserve a tax system that supports them as they care for and raise the future leaders of our state. Having a fair tax structure in Utah means making sure children, and the households they are living in, have enough money to afford the things they need.

Learn How Better Income Tax Credits Help Families

Glossary

Effective Tax Rate: the share of income a family spends on taxes. This is calculated by dividing the amount families pay in taxes by their annual household income. 

* Excise Tax: a tax directly levied on certain goods by a state, such as fuel, liquor, or cell phone plans. They are paid by the merchant before the goods can be sold and passed to the consumer through higher prices before the sales tax is added.

Nonrefundable Tax Credit: reduces the taxes owed - allows a taxpayer to only receive a reduction of their tax liability until it reaches zero.

Refundable Tax Credit: allows a taxpayer to receive a refund if the credit they receive is greater than their tax liability.

Tax Credit: a dollar-for-dollar amount that a taxpayer claims on their tax return to reduce the income tax they owe. You can use this to reduce your tax bill and potentially increase your refund amount.

Tax Liability: the amount of taxes owed by a taxpayer to the government before taking into account allowable tax credits.

Tax Policy: policies that determine how we to collect taxes. 

Sources

• https://itep.org/whopays/
• https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc

January 26th is Earned Income Tax Credit (EITC) Awareness Day!  The EITC is a vital tool in reducing child poverty, and improving the long-term outcomes for children across our state.

Some tax policies - like the EITC - promote fairness and equity. Others make social inequality worse - we call those policies “regressive;” Regressive policies disproportionately hurt lower-income individuals while disproportionately benefiting rich people. That simply isn’t fair.

Utah was ranked 29 out of 50 states (plus the District of Columbia) in a recently released report from the Institute of Taxation and Economic Policy (ITEP) —-ITEP uses a “tax inequality index” to measure the effects of each state’s tax system on income inequality.  Data from ITEP shows that lower and middle-income households pay a larger portion of their income in taxes overall, when compared to wealthier households. Middle-class families pay the highest effective tax rate (income tax, sales tax, other taxes and fees), while the wealthiest 1% of Utah households pay the least of all (see table below).  

Thirty-one states and the District of Columbia have a state Earned Income Tax Credit (EITC). Utah is one of only five states that excludes the poorest working families from benefiting from their state EITC, by making their EITC non-refundable. By contrast, many states have taken steps to ensure that their state EITC includes as many low- and middle-income families as possible. In 2024, Utah legislators will have a chance to help more Utah families, too - by making our state EITC refundable. 

Support HB 149: Make Utah's EITC Refundable!

This year, Representative Marsha Judkins (R-Provo) is championing HB149, which would transform Utah’s EITC into a refundable credit. This bold change will help many more families to afford essential necessities for their children's well-being, such as food, clothing and medical care.

On this EITC Awareness Day, let's make some noise! Reach out to your state legislators, remind them why this policy is impactful for families and children, and help us advocate for a more fair and equitable tax system.

To learn more about the Earned Income Tax Credit, see here. 

When it comes to improving the lives of hardworking Utahns, we need policies that help those who are struggling to make ends meet. A refundable Earned Income Tax Credit (EITC) could do just that.

Let's start by discussing what the earned income tax credit is and how it benefits working families and children.

What is an Earned Income Tax Credit?

You may already know about the federal Earned Income Tax Credit (EITC). It is a refundable federal income tax credit for low- and moderate-income working people, that was created to support people who are in the workforce but need extra support to meet their families' needs. To claim the federal EITC, you must have earned income and everyone on your tax return must have a social security number.

The amount of your credit will be determined by your family's earnings, as well as the number of children you have. The EITC credit may help to reduce the amount you owe on your federal taxes - and if the EITC amount is higher than the federal taxes you own, you can actually get money back from the government. 

The EITC is a critical policy tool to support financial stability in working families. Even just a few hundred dollars a year can help families stay current on bills, purchase groceries, afford car repairs, or pay down debt.

How does Utah's Earned Income Tax Credit work? 

Because the federal EITC has been so effective at supporting working families, many states have created their own Earned Income Tax Credits in order to help these families even more. Currently 31 states offer a state EITC. Utah enacted a limited EITC for families with children in 2022.

Calculating your state Earned Income Tax Credit amount in Utah is easy: it will be 20% of whatever your federal EITC amount is when you file both your federal and state taxes. However, due to the way it was structured by the state legislature, Utah's EITC currently excludes many hardworking families who should benefit. 

Our state EITC's biggest limitation is that it is "non-refundable." Utah is one of only five states with this exclusionary policy. Unlike the federal EITC, Utah's tax credit can only be applied to the income taxes you owe. You will never receive any money back from claiming the state EITC. Unless your state taxes add up to the amount of the state EITC you are allowed to claim, or more than that amount, your family misses out on the full benefit. 

A refundable state EITC is a simple and cost-effective way to level the playing field for Utah families. These days, families who don't make a lot of money struggle to afford to live and raise a family in Utah. Especially for families with young children, who are just starting out in their careers, every little bit of extra financial support really helps. 

State leaders say that our state EITC is meant to provide a maximum benefit for working families with children, with annual (adjusted) incomes between $11,000 and $26,000. Imagine a family with two young children, where one parent is still in college, and the other parent works only 32 hours a week. Because Utah's EITC is not refundable, none of the struggling families in this income range will see any benefit from the tax credit. 

Though they don't make a lot of money, these people actually pay more taxes, as a percent of their income, than the wealthiest people in Utah. These hard-working families deserve a refundable state tax credit.

Our state EITC policy also requires that your earned income must be reported on a W-2 form, as proof of your work. This requirement means the state EITC can't be claimed by self-employed people, people who work on contract and people who participate in the "gig economy" (such as driving for Lyft or watching pets through Rover). Even though these workers may be eligible for the federal EITC, they can't benefit from the state credit because they don't receive a W-2 to recognize their hard work. 

What is Refundability? 

A refundable tax credit means that if the amount of the credit is more than the amount of taxes you own, you can get the extra amount back as a refund payment! 

A non-refundable tax credit means that the amount of the credit can only ever offset the amount of taxes you owe. You can't benefit from any portion in excess of the income tax you owe, and you can't carry any unused portion of the credit over into another tax year. 

Here's how this difference plays out in Utah for a married couple with two children, filing their taxes jointly. In this hypothetical family, one parent earns $39,000 working full-time (about $19/hr), and they only owe $200 in state income tax. If Utah’s EITC were refundable, they would realize the full benefit of the credit by receiving a refund of $300. Because our state EITC is non-refundable, that $300 just disappears. After it cancels out the $200 in taxes the family owes, Utah's EITC stops working. 

In the coming year, legislators have the opportunity to empower working families in Utah with a much better Earned Income Tax Credit. By making our state Earned Income Tax Credit (EITC) refundable, state leaders could tangibly enhance the lives of these families, providing them with essential financial support needed for their daily well-being. If you're curious about the significance of equitable tax policies and the intricate web of tax distribution, learn more by following the link provided below. 

Learn More About Tax Fairness

Glossary

Tax Credit: a dollar-for-dollar amount that a taxpayer (s) claim on their tax return to reduce the income tax they owe. You can use this to reduce your tax bill and potentially increase your refund amount.

Tax Liability: the amount of taxes owed by a taxpayer to the government before taking into account allowable tax credits.

Nonrefundable Tax Credit: reduces the taxes you owe --- allows a taxpayer to only receive a reduction of their tax liability until it reaches zero.

Refundable Tax Credit: allows a taxpayer to receive a refund if the credit they receive is greater than their tax liability.

Sources

• https://www.cbpp.org/research/federal-tax/the-earned-income-tax-credit
• https://www.cbpp.org/blog/many-states-are-creating-or-expanding-tax-credits-to-help-families-afford-the-basics
• https://www.cbpp.org/research/state-budget-and-tax/states-can-enact-or-expand-child-tax-credits-and-earned-income-tax 
• https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc
• https://www.irs.gov/newsroom/tax-credits-for-individuals-what-they-mean-and-how-they-can-help-refunds#
• https://itep.org/whopays/utah/
• https://taxfoundation.org/taxedu/glossary/tax-refund/

Tax policy is complicated. Talking about taxes involves jargon, and concepts that can be confusing. For example, what is a 'refundable' tax credit? What exactly does that mean, and how does it help families? We answer these questions here with a quick breakdown of what refundability is and how it impacts families.

What is a "refundable" tax credit?

When a tax credit is refundable, it is available to all families. Even if a family doesn’t owe anything when they file their income taxes, a refundable tax credit makes it possible for them to get money back in the form of a tax refund. Families can then use that money to pay for necessities. 

What is a "non-refundable" tax credit?

A non-refundable tax credit can only ever be used to pay for taxes. If a family doesn’t owe any taxes after deductions, they can’t access any of the tax credit. If the family only owes a little in income taxes, they can only use the non-refundable credit to pay down whatever they owe.

How does refundability impact a family like yours?

In the illustrated example below, the Thompsons have two young children and make a family household income of $39,520 for the year. Based on their income and after deductions, they owe $200 in taxes. Now imagine they qualify for a $500 tax credit. Refundability can greatly impact how much they owe in taxes and whether they'll keep more of their earnings through a refund. 

If the $500 tax credit is non-refundable, it will be applied to offset what the Thompsons owe in taxes. Since they owe $200, the credit will help reduce the amount they owe to $0 – a positive outcome.

However, an even better outcome for young families arises when that $500 tax credit is refundable. If refundable, the $500 tax credit can go towards the amount they owe in taxes ($200) and the remaining amount of $300 would go back to the Thompsons as a refund. This $300 can help with expenses like car repairs, new winter coats for the kids, and baby formula. Though it may not seem like a lot, families facing financial challenges can make good use of this help.

To learn more about making Utah’s EITC refundable, go here.

To learn more about making Utah’s CTC refundable, go here.

To read about other refundable tax credits in Utah, go here.

Glossary

Tax Credit: a dollar-for-dollar amount that a taxpayer (s) claim on their tax return to reduce the income tax they owe. You can use this to reduce your tax bill and potentially increase your refund amount.

Nonrefundable Tax Credit: reduces the taxes you owe --- allows a taxpayer to only receive a reduction of their tax liability until it reaches zero.

Refundable Tax Credit: allows a taxpayer to receive a refund if the credit they receive is greater than their tax liability.

Tax Policy: policies that determine how we collect taxes.

Why Voices Opposes Proposed Income Tax Cuts

Over the past four years, Utah's Legislative Leadership has consistently prioritized tax cuts above the needs of Utah's families. Despite a $400 million tax cut passed last year that benefited the most wealthy Utahns, and now fearmongering about a supposed $130 million budget shortfall, Legislative Leadership is yet again pushing for another $170 million in tax cuts. 

As the 2024 Legislative Session unfolds, many legislators will claim a need to curb spending and tighten purse strings - that we can’t afford to fully fund social services or any new programs. The question arises: How can we afford $160 million in tax cuts when many crucial needs remain unmet? In a time when working families are struggling to afford groceries, granting more tax cuts to the wealthy is a step in the wrong direction.

Who Benefits from the Proposed Tax Cuts?

The proposed tax cut will help the richest 1% more than anyone. Our analysis shows the proposal will save the bottom 80% of Utah earners between $24 and $107. While the top 1% of Utah earners will save a whopping $2,676. These tax cuts will not provide real help to working families.

Out of the proposed $170 million tax cut, $40 million will go to the top 1% of Utah's wealthiest individuals. In contrast, the bottom 80% will split about $61 million.

Note: This image was updated to reflect the changed fiscal note for SB69, increasing the estimate from $160 Million to $170 Million on 2/23/24. 

Utah's Unfair Tax Code

Contrary to the argument that the top 1% pays more in taxes, the reality is that low- and middle-income families bear a higher tax burden. Families making less than $29,900 per year pay 9.8% of their total income in state and local taxes, while the top 1% pays an effective tax rate of only 6.4%.

Why Voices Opposes the Proposed Income Tax Cuts

Voices for Utah Children opposes the proposed tax cuts due to the unmet needs of children and families in Utah. Our income tax should be used to increase funding for education, child care, nutrition, mental health programs, and other services with long-term societal benefits.

The appeal of tax cuts fades when we realize it means losing essential services. Children need us to be their voice, and we need to show up and advocate for their future. It's not just the right thing to do for them; it's a move that benefits all of Utah. Here's why investing in children pays off:

• Investment in the future: Children are the future, and investing in their well-being leads to positive long-term outcomes. Early childhood interventions improve educational attainment, job prospects, and overall health, benefiting society as a whole. This includes supporting our child care system, which is facing a loss of nearly $600 million in federal support this year.
• Promoting equality: Programs for children often target low-income families and disadvantaged communities, narrowing the gap in opportunities and promoting a fairer society. Access to quality education, healthcare, and essential services can break the cycle of poverty, creating an even playing field for every child.
• Stimulating the economy: A healthy, educated population contributes to a stronger economy. Investments in children's programs create a ripple effect, boosting productivity, encouraging innovation, and fostering economic growth in the long run.

We need to hit pause on tax cuts and instead acknowledge that investing in children is the better path to follow. It will lead to a stronger and more prosperous Utah, and those benefits will far outweigh any tax cut currently being considered. 

The care for the children in our state and communities can be measured by our public investment in our smallest humans. From the fiscal year 2008 to 2022, Voices for Utah Children divided all state programs concerning children into seven categories, without regard to their location within the structure of state government to quantify the level of public funding and identify trends. The seven categories are:

1. K-12 Education
2. Health
3. Food & Nutrition
4. Early Childhood Education
5. Child Welfare
6. Juvenile Justice
7. Income Support

An appendix of our tables, sources, methodology and description of programs can be found here. 

How Much We Spend

The interactive circle chart below compares how much we spend by category, program, and source of funding, just use the filter and click the category to zoom in.

• K-12 Education makes up 92% of the state-funded portion of the Children’s Budget, while the federal-funded portion is more diversified across categories.

Spending Trends

We compare the budget to FY2008 because that was a peak year in the economic cycle before The Great Recession and all figures have been adjusted for inflation, so they are comparable across time.

• From FY2008 to FY2022, total public investment in children increased by 43%, growing much faster than Utah’s public-school enrollment (district & charter schools) by 26%, or the child population ages 0-17 by 13% from 2008-2021.

The federal share of the Children's Budget has fluctuated between 18-26% but had its biggest increase at the beginning of the Great Recession and the Covid-19 Pandemic. This is also when state funding for the Children's Budget has declined, for example real state & local K-12 education funding fell by $206 million since FY2020, the largest two-year decline since the Great Recession in 2008-2010. Several years after the Great Recession the federal share of the Children’s Budget decreased and the state share started to increase again, something that will hopefully happen again as pandemic relief funding rolls back. 

Funding Sources: Federal vs. State

When the categories are disaggregated by source of funding, Food & Nutrition, Income Support, Health, and Early Childhood Education programs are mainly funded by federal sources, and Child Welfare, K-12 Education, and Juvenile Justice programs are funded mainly by state sources. And since Amendment G passed and allowed the income tax to be used to fund programs for children (in addition to K-12 and some Early Childhood Education & Nutrition Programs), the Child Welfare, Juvenile Justice, and Health categories are funded primarily by the income tax. In FY2022, 98% of Juvenile Justice, 100% of Child Welfare, and 88% of Health categories of the state funded Children's Budget were funded by the income tax totaling to $475 M.

When examining the state-funded portion of the budget since FY2008 each category has a different story. 

• Juvenile Justice programs declined the most in dollar amount, $32.9 M or 28% mainly due to a reduction in correctional facility and rural programs and it also had an increase in early intervention services which advocates consider to be a goal of juvenile justice reform.
• Child Welfare programs declined by 16% or $21.8 M, mainly from the Service Delivery program which funds caseworkers to deliver child welfare, youth, and domestic violence services. 
• Income Support declined 49% or $2.1 M and appears to be more cyclical, rising and falling with the Great Recession. Interestingly, the TANF grant is a mix of state and federal funds, and only a small amount goes to Income Support or cash assistance.[i]  
• Food & Nutrition increased by 56% or $19.7 M due to an increase in liquor & wine tax revenues which supports the school lunch program.
• Early Childhood Education had the largest percentage increase of 109% or $42.0 M mainly from the Upstart program but increasing in every program except Child Care Assistance.
• Health has increased by 80% or $139.3 M from the Medicaid and CHIP program but also had a 58% or $12.4 M decrease in Maternal & Child Health. 
• The category that has increased the most in dollar amount is K-12 Education.

K-12 Education Funding

State and local sourced funding for K-12 education increased by $1.6 billion in constant 2022 dollars from FY2008 to FY2022, but per-pupil spending only increased from $10,212 to $10,537 per student. This means that even though more is being spent in total dollars, it barely covers the increase in students during the same time.

In 1948, 100% of the income tax was allocated to public education, an increase from 75% when it was originally imposed in 1931. It was expanded in 1996 to include higher education, in 2021 to include non-education services for children and people with a disability, and may be expanded again depending on a 2024 ballot measure placed by the Utah Legislature.  

The income tax rate has been reduced in 1996, 2006, 2008, 2018, 2022, and 2023.  The graphs below illustrate a timeline of these changes and Utah’s total elementary and secondary public schools (district & charter) funding effort (including capital) as a percentage of personal income and rank compared to other states.

Unfortunately, the result is a downward trajectory and likely explains our second to last place in per-pupil funding in the country.[ii]

Utah's Education Funding Effort as a Percent of Personal Income

According to the fiscal notes, the last two bills that reduced the Income Tax rate in 2022 and 2023 estimated a loss of $1.3 billion in the Income Tax Fund from FY2022-2025 with more ongoing.[iii]

State & Local Funded Portion of K-12 Education

Another result of these changes has been shifts in the funding source for K-12 education. From the fiscal year 2008 to 2022, the federal-funded portion increased by 74% and the state-funded portion declined by 3%.

Meanwhile, Local sources have increased by 12%, possibly to meet the needs of their communities while state-funded sources decline and putting greater pressure on sources like the property tax which is more regressive than the income tax because it takes a greater toll on low-and middle-income families.

Rank of Utah's Education Funding Effort Compared to Other States

We Need to Prioritize Children in the Budget

While Utah doesn’t have the most kids than any other state, we do have the highest share of kids in our population. And we as a community are entrusted to make sure they are cared for, safe, and have the tools they need to achieve their aspirations. As the Utah Legislature drafts, holds hearings on, debates, and passes the Utah state budget we hope they prioritize our most vulnerable and precious group, Utah’s children.

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[i] https://www.cbpp.org/sites/default/files/atoms/files/tanf_spending_ut.pdf 

[ii] https://www.census.gov/programs-surveys/school-finances.html 

[iii] https://le.utah.gov/~2022/bills/static/SB0059.html, https://le.utah.gov/~2023/bills/static/HB0054.html These fiscal notes show the loss from the income tax fund but they are not disaggregated by changes from the income tax rate or tax credit portion of the bills.