Poverty

January 10, 2024

Our 2024 Legislative Agenda

At Voices for Utah Children, we always start with this guiding question: "Is it good for all kids?" That remains our north star at the outset of the 2024 legislative session, and is reflected in our top legislative priorities.

So, what’s good for all kids in 2024?

A Healthy Start!

A healthy start in life ensures a child's immediate well-being while laying a foundation for future success. We are steadfast in our commitment to championing policies that prioritize every child's physical, mental, and emotional well-being. Central to this commitment is our focus on improving Utah’s popular Medicaid and CHIP programs, which are pivotal in the lives of many Utah children and families. 

This legislative session, a healthy start for kids looks like:

  • Empowering Expectant Mothers: We support a proposal from Rep. Ray Ward (R-Bountiful) to increase access to health coverage for low-income and immigrant mothers-to-be.
  • Increasing Access to Health Care: We support bills that aim to improve access to the vital healthcare services children and parents need, especially for those on Medicaid and CHIP.
  • Protecting Health Coverage: We oppose any effort to defund, and exclude deserving children from, the Medicaid and CHIP programs that help thousands of Utah kids every year. 

Early Learning and Care Opportunities!

The formative years of a child's life lay the foundation for their future, shaping their cognitive abilities, socio-emotional skills, and passion for learning. We will support efforts to increase access to home visiting programs and paid family leave, but ensuring consistent, quality, and affordable child care is our top priority.

This legislative session, early learning and care opportunities for kids looks like:

  • Bolstering Access to Quality Child Care: We support the efforts of both Rep. Andrew Stoddard (D-Sandy) and Rep. Ashlee Matthews (D-Kearns) to extend the successful Office of Child Care stabilization grant program that has supported licensed child care programs statewide.
  • Investing in High-Quality Preschool: We support an anticipated legislative proposal to streamline Utah’s existing high-quality school-readiness program and to make it available to more preschoolers statewide. 
  • Recruiting and Retaining Child Care Professionals: We support Rep. Matthews’ proposal to expand access to the Child Care Assistance Program for anyone working in the child care sector.
  • Building New Child Care Businesses: We also support Rep. Matthews’ proposal to continue funding for work to develop and support new child care programs in rural, urban, and suburban areas.

To view a more comprehensive list of our 2024 early care and learning legislative priorities, click here

Economic Stability for Families with Children!

Economic stability forms the bedrock of thriving families and vibrant communities. To ensure that young families in Utah have the support they need to afford basic necessities, we will advocate for increasing families’ access to Utah's earned income and child tax credits.

This legislative session, economic stability for families looks like: 

  • A Little Extra Help in the Early Years: We support HB 153, Rep. Susan Pulsipher’s (R-South Jordan) bill to expand Utah’s new Child Tax Credit, (currently only for children ages 1 to 3), to apply to children between 1 and 5 years of age. We also strongly recommend helping even more Utah families with young children by making the tax credit available for families with any child between birth and 5, and expanding it to include the thousands of lower- and moderate-income families who are currently excluded.
  • Credit for Working Families with Kids: We support HB 149, Rep. Marsha Judkins’ (R-Provo) bill to expand Utah’s Earned Income Tax Credit so that more lower- and middle-income families with children can benefit. 

Justice for Youth!

We want to ensure that all youth, including those who come into contact with the juvenile justice system, have access to interventions and supports that work for them and for their families. We are dedicated to advancing policies and recommendations that contribute to a more fair and equitable juvenile justice system for all Utah youth.

This legislative session, justice for youth looks like:

  • Prioritizing School Safety: We are monitoring bills from Rep. Wilcox (R-Ogden) and the School Safety Task Force, including: HB 14, “School Threat Penalty Amendments” and HB 84, “School Safety Amendments.” We remain hopeful that these efforts will support a secure learning environment for all students, without contributing further to the School-to-Prison Pipeline. 

Be an Advocate!

As we chart the path forward, one thing remains abundantly clear: the well-being, growth, and future of Utah's children rely on the decisions we make today. Each legislative session presents an opportunity—a chance to reaffirm our commitment, reevaluate our priorities, and reimagine a brighter, more inclusive future for all. 

Together we can continue to make Utah a place where every child's potential is realized, their dreams are nurtured, and their voices are heard.

Below are some ways you can get involved this session. 

Stay Informed with our Bill Tracker

Stay informed about important legislation we are watching and reach out to your local representatives to let them know how you feel about legislation that is important to you. We make it easy for you to subscribe and watch bills that you are most concerned about. 

VIEW TRACKER

 

Join us for Legislative Session Days on the Hill

Join us at the Capitol, where we offer attendees the opportunity to engage in the legislative process on a specific issue area (health and/or child care). You'll have the chance to attend bill hearings, lobby your legislators, connect with fellow community advocates, and watch House and Senate floor debates. Click the button below for the dates/times of our meetings and to RSVP.

RSVP TODAY

 

Celebrate Utah's Immigrant Community 

In collaboration with our partners at UT With All Immigrants, the Center for Economic Opportunity and Belonging, and I Stand with Immigrants, we are organizing Immigrant Day on the Hill. Join us to discover ways to engage in Utah's civic life. Enjoy food, explore resource tables, participate in interactive activities, and entertainment. Everyone is invited to attend this free event!

Event Details: February 13, 2024, 3:30pm-5:30pm at the Capitol Rotunda, 350 State St, Salt Lake City, UT 84103

RSVP TODAY

Published in News & Blog

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. 

tax fairness graph

Effective Tax Rate 1Towards 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

Published in News & Blog

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).  

Screenshot 2024 01 24 at 9.13.59 PM

 

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. 

Screenshot 2024 01 11 at 4.02.33 PM

 

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

Published in News & Blog

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. Edited EITC states graph

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. 

EITC example

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

Published in News & Blog

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

graph1

 

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

graph 2

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.

Published in News & Blog