Wednesday, October 4, 2023

Voices for Utah Children is proud to have co-hosted the momentous unveiling of the new State CHIP Program during our morning press conference. We are grateful to have worked with Senator Luz Escamilla (D-Salt Lake City) and Representative Jim Dunnigan (R-Taylorsville) to support the passage of SB217: ChIldren’s Health Coverage Amendments that led to the creation of this program.

Voices for Utah Children's goal for every child in Utah to have health insurance and access to high-quality health care.

In our state, an estimated 7.9% of children in Utah do not have health insurance, with greater disparities amongst rural children and Latino children, placing Utah as 37th in the nation for insured children.

The State CHIP program will play a crucial role in bridging this gap by providing comprehensive healthcare coverage, so that children can access the medical care they need when they need to lead a healthier and more secure life. 

This State CHIP Program is one piece of that puzzle.

The State CHIP program provides newly eligible children with comprehensive healthcare coverage, including well-child exams, immunizations, doctor visits, prescriptions, mental health services, and more, supporting more kids to have the opportunity to grow and thrive because of the access to coverage.

We are excited to continue working with Senator Escamilla, Rep. Jim Dunnnigan, and our 100% Kids Coverage Coalition, community and faith leaders, healthcare systems and providers, and more to outreach to all of our Utah families throughout the state so children get the health coverage and care they need. We know that this program will make a positive impact on many Utah families statewide and will get us closer to the goal of having all Utah kids covered.

Let’s get all Utah kiddos covered!

For more information about State CHIP for non-US citizens starting January 1, 2024 click here.

For more information about the new State CHIP program visit: https://chip.health.utah.gov/.

For more information about our 100% Kids Coverage Coalition visit: https://www.100percentkids.health/.

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

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/

When the pandemic hit, child care was one of the first sectors in crisis. But action in the form of federal aid and swift state program implementation prevented widespread program closures. The nearly $600 million Utah received in federal child care funds helped stabilize the historically struggling sector and defied national trends by expanding the number of child care slots available. This substantial funding is estimated to have supported child care services for over 85,200 children in Utah.

As federal COVID-era funds begin to wind down, child care providers and the parents they serve are looking to elected officials to ensure that the sector doesn’t immediately fall back into total crisis. Child Care Stabilization Grants, a key program of the funding, are currently playing a vital role in enabling child care providers to stay open, keep costs down for families, and raise wages in an industry that has been long plagued by inadequate compensation. Unfortunately, the lack of commitment from federal, state, or local governments to sustain these successful programs with new funding means most COVID-era programs will end, ultimately leaving parents with ballooning child care costs, and abandoning child care providers to navigate a broken system.

Starting in October, Utah families will begin to experience the impact of the child care funding cliff.

What change is happening this fall?

As federal funding runs out, Utah’s Office of Child Care (OCC) will reduce monthly Child Care Stabilization grant amounts by 75% in October. By June 2024, the grants will end entirely.

How will this change impact Utah providers and families?

Providers are preparing now for the impending grant reductions. For example, PC Tots, a program in Park City, already announced tuition increases due to a funding gap of $620,000 from the loss of ARPA money. One family reported a $1,000 monthly tuition increase for their two children enrolled in PC Tots, highlighting the financial strain this poses for many families.

The wind-down and ultimate end of stabilization grants also presents additional concerns for providers. When surveyed, 36.7% providers anticipate being unable to sustain wage increases for their child care staff or, in some cases, will have to cut wages. Without intervention, this will likely to lead to higher turnover rates among child care staff, resulting in more disruptions in care for families and a further reduction in available child care slots, statewide, due to understaffing.

How will the end of stabilization grants impact Utah's child care sector?

A recent report from The Century Foundation identified Utah as one of six states where half or more of all licensed child care programs statewide could close, without new funding to replace the federal support.

Their analysis estimates that in Utah:

• 35,614 children will lose access to child care.
• 663 child care programs will be forced to close their doors.
• Parents will experience a collective loss of $101 million in earnings.
• 1,304 child care jobs will be lost.

Deep, structural problems within the child care system existed well before the COVID pandemic; those problems will persist and worsen when COVID-era funding runs out. With 77% of Utahns living in child care deserts, parents already allocating 14-25% of their income on care, and providers making less than animal caretakers, we can’t afford to reduce our investment in child care. The child care market faces new challenges too. The current robust job market has made it increasingly difficult for child care providers to compete for good employees. And inflation has caused the cost of normal expenses to skyrocket for families. 

As we look towards the fall, parents and providers should prepare for these difficulties. But also, state and local policymakers need to pay attention and ask what they can do to mitigate a new child care crisis. 

This blog post is part of a series of blog posts examining Utah's child care funding cliff. You can find the other posts here:

• Utah's Child Care Crisis is About to Hit a Whole New Level
• How Much Will Each Utah County Soon Lose in Child Care Funding?
• What Happened with Child Care During the Legislative Session?

To learn more about our initiative to invest in child care, go to UtahCareforKids.org. 

Utah’s family demographics have changed. 53% of Utah families have all available parents in the workforce, making child care a necessity. These days, most Utah families need two incomes to maintain financial stability. But Utah’s licensed child care system struggles to meet the demand. Licensed child care program capacity is only sufficient to serve about 36% of all children under six whose parents are working.

To provide a comprehensive picture of Utah's current child care crisis, this report produced by Voices for Utah Children examines the availability of licensed child care across the state, and in each individual county. By conducting a detailed analysis of both the demand and supply of child care services, the report aims to provide policymakers and the public with a clear understanding of the urgent need for child care reform.

Download a copy of the report here.

County-Level Data

Statewide Data

Takeaways

There is insufficient licensed child care in Utah to meet the needs of working families.

There are more than 154,000 children under the age of six living in Utah with all available parents in the workforce. But, there are only 54,804 licensed child care spots in 1,367 programs statewide. Licensed child care program capacity is only sufficient to serve about 36% of all children under six whose parents are working. That means the working families of nearly two-thirds of Utah’s youngest children must rely on alternate arrangements (such as utilizing family members, hiring or sharing a nanny, alternating parent work schedules, using unlicensed child care providers, or some combination of these).

The high cost of child care makes it even less accessible to low- and middle-income families, and rural families struggle most.

Affordability remains a significant hurdle with child care costs often consuming a substantial portion of a family’s income. The U.S. Department of Health and Human Services defines affordable child care as care that costs no more than 7% of a family's income. In Utah, the average annual cost of care for two children under the age of six (one infant, one preschool-aged child is $16,890, taking up about 17% of family’s income. For a family in rural Grand County, the cost of that care is actually higher at $17,339, consuming 41% of their income. The lack of dramatic differences in child care prices from county to county is an illustration of how little flexibility providers have to reduce tuition costs for parents, even in areas of the state where family incomes clearly can’t keep up.

Licensed child care is insufficient in every county in Utah, though the level of unmet need varies from place to place.

Summit County emerges as the county with the highest percentage of child care need met (54%), followed by Carbon, (48%) Sevier (45%), Grand (45%), Salt Lake (45%), and Iron Counties (41%). All other counties have less than 40% of child care need met with licensed program capacity, and multiple rural counties (Daggett, Piute, Rich, and Wayne) have no licensed child care available at all.

With substantial public investment, Utah’s child care system has grown 31% since the start of the COVID pandemic.

Through various federal funding streams, nearly $600 million has worked to grow Utah’s child care capacity from approximately 42,000 licensed slots in March 2020 to over 54,000 in August 2023. In contrast to many other states, Utah has managed to increase its licensed child care capacity - despite substantial pandemic disruptions - through stabilization grants paid directly to existing providers for wage supplementation, startup support for new programs, and a one-time worker bonus of $2,000 per child care professional. These financial investments both expanded the enrollment capacities of existing programs as well as recruited new providers into the sector. However, with the ending of this funding in October 2023, Utah risks jeopardizing this incredible progress.

Recommendations

1. Commit to Public Investment in Child Care

Utah’s child care crisis requires public investment. Funding is needed to bridge the gap between what families can afford and the true cost of care. While businesses can contribute, their capacity to address this crisis is limited. There is no sufficient source of investment to address child care’s market failure aside from public funding. Child care should be valued in the same ways as the public education system, ensuring equal access and opportunities for all children. Currently, the burden of expensive early education falls largely on Utah families, with minimal public support, even though most brain development occurs before age six.

2. Help Parents Afford the Care They Want

Utah’s current child care system doesn’t promote parent choice. Child care affordability and accessibility severely limit family choice when it comes to child care, forcing decisions based on cost or access, rather than preference. This also impacts family planning and career choices. Parents are forced to make difficult choices, such as changing jobs, adjusting school and work schedules, or choosing suboptimal child care situations. To address these issues, policymakers should consider improving the child care subsidy program, expanding the child tax credit, and finding ways to help alleviate the financial burden on Utah families.

3. Support the Critical Work of Child Care Professionals

Child care professionals face significant financial challenges. Low wages and a lack of benefits, including healthcare and retirement, have made the profession unsustainable, leading to high rates of turnover each year. Since Utah’s current child care system only meets 36% of the state's need, Utah must invest in the early child care profession to attract and retain a robust workforce. To support child care providers, policymakers should consider measures including state funding of Child Care Stabilization Grants, wage supplement programs, eliminating barriers to licensure, and increasing access to employment benefits.

For questions or inquiries regarding this report, please contact Voices staff members: 

• Anna Thomas,
• Jenna Williams,  

We know that Utah’s child care crisis is bad, and is going to get worse. New data helps illustrate exactly how bad the situation is, in each county across the state. 

Next week Voices for Utah Children will release a report titled, “Mapping Care for Kids: A County-Level Look at Utah’s Crisis in Licensed Child Care.” The report includes more detailed county-level analysis and data highlighting the inaccessibility of care and financial challenges faced by families and child care professionals. In addition, the report includes policy recommendations for Utah leaders to help resolve this crisis. 

The full report will be available the week of October 23rd, but as a teaser, this blog highlights some key findings from the report.

There is insufficient licensed child care in Utah to meet the needs of working families.

Licensed child care program capacity is only sufficient to serve about 36% of all children under six whose parents are working. Parents face shortages in every county statewide, with rural families struggling most.

The high cost of child care makes it even less accessible to low- and middle-income families, and rural families struggle most.

The average annual cost of care for two children under the age of six (one infant/toddler, one preschool-aged child) for a Utah family costs about 17% of a 4-person family’s income. Cost varies little between rural and urban counties, but on average household median incomes are lower in rural areas. In Grand County, with the state’s lowest median annual income at $42,654, the cost of care for a family of four would comprise about 41% of a family’s income.

Child care providers receive insufficient compensation, and have few incentives to stay in the field.

Child care providers typically earn low wages and very limited benefits. The median hourly wage for child care professionals in Utah is just $12.87 per hour ($26,770/year), less than they could make as professional dog walkers. The poverty rate among child care providers in Utah is 23.1%, more than 8 times higher than that of K-8 teachers. 

With substantial public investment, Utah’s licensed child care capacity has grown significantly since the start of the COVID-19 pandemic.

Thanks to federal funding streams totaling nearly $600 million, licensed child care capacity in Utah has grown by approximately 31% since March 2020. This growth is due primarily to child care stabilization grants made directly to licensed child care providers; those grants recently were reduced by 75%. Utah has been identified as one of six states that could see half or more of all licensed child care programs statewide close with the end of the stabilization grants.

Licensed child care is insufficient in every county in Utah, though the level of unmet need varies from place to place.

How does child care access and affordability compare in each county?

Our full report, “Mapping Care for Kids: A County-Level Look at Utah’s Crisis in Licensed Child Care” will be released the week of October 23rd. For questions about the report, this blog, or sources and methodology, please contact Jenna Williams at . For more information on efforts to improve Utah’s child care system or learn about the child care advocacy network, visit utahchildren.org/issues/early-childhood-education and utahcareforkids.org.

Child care certainly received its fair share of discussion this legislative session, but did anything really happen? The short answer is kinda. Here’s what happened.

During the session, Voices for Utah Children teamed up with parents, child care professionals, and early childhood advocates to lobby the state legislature for more than $260 million to stabilize Utah’s child care system. This was, admittedly, a big ask. But the requests highlighted the reality of the child care sector’s needs. Many of the state funding requests aimed to replace expiring federal pandemic money that has been propping up the sector. This emergency federal funding will begin to end in June 2023 and will fully expire by June 2024. 

Child Care Stabilization Grants, Rep. Andrew Stoddard
Federal Child Care Stabilization Grants have been a lifeline for Utah's child care sector. Child care providers have indicated the lack of ongoing stabilization funding will result in one or more of the following three outcomes: child care programs will close, tuition will be raised for families, and/or employees will have lower wages. This funding would have allowed for a one-year extension of the stabilization grants currently received by hundreds of child care providers in Utah. 
Requested: $216 Million
Outcome: NOT FUNDED

Retention Incentives for Early Childhood Professionals, Sen. Luz Escamilla
In 2022, federal funding allowed Utah's Office of Child Care issued $2,000 bonuses to eligible workers serving in child care positions to provide recognition for their critical work throughout the COVID pandemic and to improve retention within the field. 9,368 child care professionals received retention incentives through this program. This funding request would have continued this incentive program for an additional two years while structural reforms were pursued. 
Requested: $38 Million
Outcome: NOT FUNDED

Regional Child Care Development Grants, Rep. Ashlee Matthews 
Through federal funding, Utah's six Regional Care about Child Care Resource & Referral Agencies supported new programs for rural outreach, small business training, start-up grants, and professional development. This funding would have continued these grants for another three years to continue programming that works to expand child care access and improve care in both rural and urban areas.
Requested: $2.1 Million
Outcome: NOT FUNDED

Child Care Licensing-Related Fees, Rep. Ashlee Matthews
With COVID-relief funding, the Office of Child Care Licensing has waived the fees associated with licensing in order to lessen the barriers to expanding, maintaining, and opening new child care programs. This funding would have extended this fee coverage for another three years as the state tackles the child care crisis. 
Requested: $3 Million
Outcome: NOT FUNDED

Child Care Solutions and Workforce Productivity Plan, Sen. Luz Escamilla
A priority of the Governor’s Office of Economic Opportunity’s Women in the Economy  Subcommittee, these funds will support strategic planning for child care solutions.
Requested: $250,000
Outcome: $150,000

Legislation

HB 167: State Child Care, Rep. Ashlee Matthews & Sen. Luz Escamilla
This bill provides the framework for State agencies to convert empty state buildings to on-site child care. It will allow private providers to rent the space and operate from the facility, creating greater access to child care for employees and the greater community.
Outcome: PASSED

HB 170: Child Tax Credit Revisions, Rep. Susan Pulsipher & Sen. Daniel McCay
This bill provides a non-refundable yearly tax credit of $1,000 per child between the ages of 1-3 for families making up to $43,000 for single filers and $54,000 for households filing married jointly. Because the bill’s original intent was to help with the cost of child care, we’d like to see this expanded to help children ages 0-6, as it did in the original bill. This legislation makes Utah the 13th state with its very own state child tax credit.
Outcome: AMENDED VERSION PASSED 

HB 282: Child Care Sales Tax Exemption, Rep. Christine Watkins
This bill would have allowed for a sales and use tax exemption for construction materials used to construct or expand a child care program.
Outcome: BILL NEVER HEARD IN COMMITTEE

Advocacy

While our policy wins feel small, it was a stellar year for child care advocacy. We hosted our first Child Care Advocacy Day, where we welcomed over 100 parents, kiddos, providers, and supporters of child care in Utah’s Capitol Rotunda! The turnout far surpassed expectations and we hosted many new faces. We look forward to continuing to grow our network of child care advocates and working on solutions to child care during the interim. 

To learn more about child care advocacy in Utah, visit UtahCareforKids.org.

Congratulations, Utah parents and educators! Together, we did it. Funding for optional full-day kindergarten is now a reality for schools statewide. 

The Utah Legislature passed HB477, "Full Day Kindergarten Amendments," sponsored by Rep. Robert Spendlove (R-Sandy). This bill establishes the same flexible, stable funding stream for full-day kindergarten as currently exists for all other grades of public school, first through twelfth. Last week, Governor Spencer Cox signed this historic bill into law! 

(Click here to jump to our four-minute explainer video, which is also included at the bottom of this page)

Does this mean that next school year, every family in Utah will have the opportunity to enroll their kindergartner in a full-day program in their neighborhood school? Unfortunately, no. It DOES mean that the number of families who will have access to full-day kindergarten will increase dramatically - we estimate between 60% and 65% of kindergarteners will be able to enroll in an optional full-day program during the 2023-24 school year. This is is a huge leap from fewer than 25% just five years ago!

The passage of HB477 means that next school year (2023-24), every district and charter elementary school will have the opportunity to offer optional full-day kindergarten, using this new state funding stream. 

In order to offer more full-day kindergarten, schools must have more classroom space, more teachers, and more equipment like tables and chairs. Some school districts and charter schools have spent the last several years making plans to overcome these challenges, and will be ready to offer optional full-day kindergarten to most, if not all, of their local families in the coming school year. 

Some elementary schools are not quite ready to take advantage of this opportunity. These schools will need some time to overcome the challenges of: 1) limited classroom space; 2) recruiting new teachers; 3) purchasing new materials and equipment; 4) busing adjustments; and other practical issues. This is true particularly in some of our large, suburban school districts, such as Jordan, Davis and Alpine. Other small- and mid-size districts face some of these issues, as well. 

We estimate that it will take between three and five years before all Utah families have the opportunity to enroll their child in a full-day kindergarten program. Based on the popularity of newly expanded full-day programs in different parts of the state, we expect to see more than 90% of parents opt for full-day kindergarten for their children when it becomes available to them. 

The best way to find out whether your local elementary will be offering optional full-day kindergarten during the 2023-24 school year is to contact the current principal of that school (or the director, in case of charter schools) and ask them directly! Not only will this help you to plan for your family's schooling schedules, but it will help our local education leaders assess how much community interest exists for more optional full-day kindergarten. 

In case you were worried, the new law preserves parents' right to enroll their child in a half-day program, and does not make kindergarten mandatory. There is nothing in the law that tells districts and charters how much optional full-day kindergarten they must offer to their communities, or how soon they have to do so. HB477 was created to be as flexible as possible, allowing local communities to decide the right mix of half- and full-day programming for them. 

Thanks to all the hard work of education leaders, insistent parents and committed community advocates, we have finally accomplished state funding for optional full-day kindergarten in Utah! We especially appreciate the commitment of the United Way of Salt Lake and the Utah PTA, our core partners in the Utah Full-Day Kindergarten Now Coalition.

Of course, this would not have happened without the support and leadership of State Superintendent Sydnee Dickson, Sara Wiebke, Christine Elegante and other superhero staff at the Utah State Board of Education. We owe a lot to our bill sponsor, Rep. Spendlove, and the other legislative champions like Senator Ann Millner who have been key to this effort in the past (former Reps. Lowry Snow and Steve Waldrip, we are looking at you!). 

The Legislature finished its 2023 General Session last Friday evening, March 3rd. In the area of tax policy, we've prepared the chart above to summarize the tax cuts passed this year. 

The tax cuts that will go into effect in the next year add up to $408 million. Three-fifth of that amount goes to the highest-earning one-fifth of Utahns, and four-fifths goes to the top two-fifths. That leaves just one-fifth for the 60% of Utahns earning under $92,000. Unfortunately, these changes do nothing to improve the overall regressivity of Utah's current tax structure. 

The picture improves slightly if we count the $200 million elimination of the state sales tax on unprepared food. Because the food tax is the most regressive element of our most regressive tax, removing it does reduce (but not eliminate) the regressivity in Utah's tax structure. (This part of HB 54 will only go into effect in 2025 if voters approve a Constitutional amendment ending the earmarking of income tax for education in November 2024. That earmark was broadened in 1996 to add higher education and again in 2020 via Amendment G to add all programs for children and for disabled Utahns to the permitted uses of income tax revenues.)

To clarify, we consider Utah's overall tax structure to be regressive because the highest income Utahns pay the lowest share of their incomes in state and local taxes, based on the analysis at www.ITEP.org/WhoPays/Utah. 

We welcome the proposed elimination of the grocery tax and the reduced regressivity it would bring, especially since it benefits all low-income Utahns, including the considerable number who never file a tax return. We also welcome the much smaller but still beneficial impacts of the new non-refundable Child Tax Credit (CTC) and slightly expanded non-refundable Earned Income Tax Credit (EITC). Here are some specifics on those: 

• Elimination of the $200 million state grocery tax reduces taxes on the lowest-income fifth of Utahns (those earning under $31,000) by $18 million, and it reduces taxes on the lowest-income two-fifths (those earning under $59,000) by a total of $48 million.
• The new Child Tax Credit (CTC) reduces taxes for those same two-fifths of Utahns by $9 million. It also makes Utah the 13th state with our own CTC, though NCSL's website indicates that ours will be one of just four that are non-refundable. 
• The slightly expanded Utah EITC adds a reduction of $1 million for the low- and moderate-income 40% of Utahns. Sadly, it still excludes the lowest-income 80-90% of Utah's federal EITC recipients because it remains non-refundable.

Those three tax reductions add up to $58 million for low- and moderate-income Utahns, which means that less than 10% of the overall tax cut reaches the 40% of the population that needs it most. (For more about why refundability is critical for the effectiveness of family tax credits like the ETC and CTC, please visit https://www.utahfamilytaxcredits.org/learnmore/.)

Unfortunately, the majority of the $608 million in tax cuts goes to Utahns earning six-figure incomes, who neither need nor are asking for tax cuts. In fact, the survey conducted during the legislative session by the Deseret News and Hinckley Institute found that just 18% of Utahns wanted a tax cut. The overwhelming majority supported investing more in education, infrastructure, saving the Great Salt Lake, and other building blocks of Utah's future prosperity and success: 

 This result is consistent with previous polling on the question of whether Utah should be cutting taxes. Previous polls include....

• Deseret News/Hinckley Institute 2022
• Deseret News/Hinckley Institute 2021
• Deseret News/Hinckley Institute 2020
• Utah Foundation 2020
• Envision Utah 2020

Clearly the public is more concerned than Utah's political leaders about the billions of dollars in unmet needs identified by the Invest In Utah's Future coalition. The public is probably also aware of the two biggest problems with cutting the income tax: 

1. Cutting the income tax leads to higher property taxes as the local districts struggle to make up the lost education revenues. And in fact, the last 14 years have seen inflation-adjusted per-student local education revenue (from property taxes) rise 12% while inflation-adjusted per-student state funding (from the income tax) fell 2.5%. Given the spike in local property taxes in the last year or two, it was disappointing to see that the Legislature failed to pass even very modest measures like HB 260 that would have devoted $5 million to expand eligibility for the state's property tax relief programs to more low- and moderate-income households. 
2.  Cutting $400 million from the income tax breaks down to well over $500 per student diverted from the main source of education funding. For the median income family of four, they gain about $200 in tax cuts -- but lose over $1,000 that now will not be invested every year in their own kids' education. 

Unfortunately, the Utah Legislature has proven once again that it is all too ready to give in to the tax cut temptation, even though Utah already has the 7th lowest taxes in the nation according to WalletHub, and despite the fact that we are already a top 10 state nationally for our business-friendly taxes, according to the Tax Foundation. 

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WE'VE POSTED A VIDEO WALK-THROUGH OF THE CHART ABOVE AT https://fb.watch/jcAUe4-Rqr/ 

To date, the state legislature’s minimal efforts to address Utah’s complex child care crisis are completely out of proportion to the scope of the problem. 

None of those efforts have offered much relief for Utah families with young children who are struggling with the rising cost of child care. They certainly don’t contemplate the urgency of the impending “federal funding cliff” that is about to push child care costs even further through the roof. 

Policy proposals that require a meaningful investment of state dollars - and pretty much all the effective ones will - have been ignored by elected officials. 

Before the session ends on March 3rd, however, the legislature has a chance to pass legislation that would actually provide financial relief for some families with young children. 

Yes, it will require state investment - but the one kind of investment that legislators seem most enthusiastic about: a tax cut!

Well, a tax CREDIT, which is sort of like a tax cut for the Utahns who qualify. 

Representative Susan Pulsipher (R-South Jordan) has introduced a narrowly-tailored Child Tax Credit, which would allow families to claim up to an extra $1,000 per child each year, to help cover a small portion of the staggering costs of caring for a child. Families that make more money can claim a smaller amount, on a sliding scale. 

The bill is House Bill 170: Child Tax Credit Amendments (originally named "Child Care Tax Credit Amendments). It has only recently moved forward in the legislative process, after its initial introduction in mid-January. With just a couple of weeks left in the session, there is still a chance that this tax credit - with a price tag of less than $41 million - could be included in whatever tax package the legislature inevitably passes. 

Rep. Pulsipher’s goal is to help families who still struggle to afford the costs of raising young children. 

The money they save with this tax credit can be used by families in any way that works for them. If a parent stays home, it can help cushion the financial burden of having a one-income household. If both parents work, it can be used to cover the costs of child care while they are working. 

There are a few catches, though:

• This $1,000 tax credit can only be claimed for children who are under the age of six at the time you file your taxes. Child care costs go way down for a family once a child is enrolled in school. 
• In order to be eligible, your household must meet certain household income requirements (for example, a household with a joint filing status must be less than $54,000 to quality for the full amount of the credit).
• If your family makes more than a certain amount of money, you can still claim this tax credit, but it is phased out based on your household income. 
• If you don’t end up owing any income taxes when all the math is said and done, you won’t get a check in the mail from the state for each child. This tax credit would be “non-refundable.” That means the tax credit can only be used to put a dent in the income taxes you owe; it can’t put extra money in your pocket if your income taxes calculate down to zero. 
• You won’t be able to claim the tax credit THIS YEAR. Or even next year. It would go into effect when you file your 2024 taxes in 2025. 

Even with these strict parameters, we think having a Child Tax Credit available for some Utah families is a great step toward grappling with our state’s child care problems in a meaningful way. 

HB170 offers legislators an opportunity to show they are willing to invest in families with young children in the face of a crisis that is about to get a lot worse. We hope they take it!

Write to your legislators about HB170 “Child Tax Credit Amendments!”