Tax and Budget

Voices for Utah Children Releases Tax Cut Survey Results:

90% Support Investing In Utah Kids Rather Than Tax Cuts

Salt Lake City -- Today, February 23, 2021, Voices for Utah Children released the current results of our Tax Cut Survey.

The Tax Cut Survey is an online survey open to the public and posted at https://utahchildren.org/newsroom/speaking-of-kids-blog/item/1112-tax-cut-survey. The survey has been advertised to hundreds of thousands of Utahns through ads in the Deseret News and Salt Lake Tribune that included graphics like this one: 

THE RESULTS.... (drum roll please....)

So far, hundreds of Utahns from all over the state have participated in the survey, which consists of two questions: 

1.When it comes to tax cuts, is your overall opinion closer to A or B (select one)

A. We should invest in Utah kids -- their education, healthcare, and other critical needs -- rather than tax cuts, especially in light of the fact that Utah's taxes are already at a 50-year low.

B,   We should continue cutting taxes because state government has more than enough resources to accomplish what it needs to accomplish. 

90% of survey participants chose A, and 10% chose B, as illustrated in the following pie chart graphic:

In question 2, the survey asked: "How would you rank the following seven possible tax cuts?"

Participants ranked the seven options as follows, in order from most popular to least popular:

1) One-time Utah tax rebates for low incomes ($200/person)

2) Utah EITC -- a state match for the federal Earned Income Tax Credit for low and moderate incomes

3) One-time Utah tax rebates for low and moderate incomes ($100/person)

4) Military pension and Social Security tax credit for low-income retirees

5) Child tax exemption expansion for middle- and upper-income families with children

6) Military pension and Social Security tax credit for high-income retirees

7) Income tax rate reduction (mostly benefits high-income households)

The survey webpage also includes a detailed description of each of the proposals, including bill numbers for some of the items.

WHAT DO THESE RESULTS MEAN?

The response to the first question -- a strong public disinclination to support tax cuts -- is consistent with three surveys done in 2020 -- all of which were rigorous public opinion surveys intended to accurately reflect the views of Utahns in all their diversity, unlike this open, online survey. Those three surveys last year were conducted by the Deseret News and Hinckley Institute, by the Utah Foundation, and by Envision Utah, and they all found a similar strong popular preference for public investment over tax cuts. A new survey this month by the Deseret News and Hinckley Institute also found majority support for investing in Utah's future rather than cutting taxes. 

The response to the second question -- a clear inclination to favor tax cuts for lower-income Utahns over tax cuts for upper-income Utahns -- runs counter to the plans outlined by Legislative leaders this week to pass tax cuts that mostly benefit upper income Utahns and exclude lower-income Utahns from tax relief. A detailed analysis of two of those proposals is on the Voices for Utah Children website.

Survey participants were offered the opportunity to share their location and any additional thoughts, and here are some of the comments that were left:

• A survey participant from Clearfield commented, "I love EITC. It helps those who need it most and rewards people for working. If this passes, I would really like to see more singles and older couples who are not currently included in federal EITC included. This may be a targeted way to help low-income seniors."
• A survey participant from Mt. Pleasant commented, "I am a US Army Reserve retiree. Every year the State of Utah gouges me for more than the feds Give the military, especially the lower income USAR retirees a tax break."
• A survey participant from Sandy commented, "We need to invest in getting people out of poverty!"
• A survey participant from Millcreek commented, "My # 1 would be removing the sales tax on food completely."
• A survey participant from Pleasant Grove commented, "invest in services and affordable starter homes; it's a Pandemic! and the need is so great for Utah families with low to mid incomes."
• A survey participant from West Jordan commented, "I believe we need to leave the taxes alone for now and take care of our low income citizens.  Our DSPD [disability services] waitlist is shameful and individuals are waiting for services."
• A survey participant from Midvale commented, "I'm okay with paying my taxes. If you want to look at a place where people don't pay enough taxes, look at India. Look at Russia, look at Mexico. Let's make sure that money collected by the government is being spent on families, education, healthcare and keeping our cities and towns running efficiently and effectively for EVERYONE. We know that trickledown economics has a limited effect and let's not let the highest earners amongst us allow themselves to imagine that somehow the proportion of what they are able to take from the system should be greater than what they need to pay into the system - like the rest of us."
• A survey participant from Brigham City commented, "Tax the rich people MORE!!!"
• A survey participant from Sandy commented, "We don't need a tax cut. We need to increase taxes specifically to provide additional help to low income families, especially children in low income families, and especially those at or below the poverty line."
• A survey participant from Provo commented, "Successful business people invest in their businesses. Successful citizens invest in their children"
• A survey participant from Sandy commented, "I am single income, no kids (SINK) and my taxes are awful.  However, I definitely want to help low income families."
• A survey participant from Spanish Fork commented, "Eliminate taxes on Social security benefits."
• A survey participant from Farmington commented, "I do not favor reinstating sales tax on food."
• A survey participant from Holladay commented, "tax rebates are stupid, one-time cash gifts when SO MANY public sectors dealing with education and the homeless need to be funded!"

Voices for Utah Children's Fiscal Policy Director Matthew Weinstein commented, "Political leaders are calling for tax cuts, but average Utahns are not. Utahns see the state of our schools and the unmet needs in so many areas of public responsibility. Utahns want to see our leaders solve those problems, especially as we continue to grapple with all the challenges of the COVID pandemic and recession."

The survey remains open through the end of the legislative session on March 5. All Utahns are invited to express their views at https://utahchildren.org/newsroom/speaking-of-kids-blog/item/1112-tax-cut-survey.

In addition, Utahns who want to write their legislators about this issue are invited to make use of our customizable form letter by clicking here. 

 Detailed description of the 7 tax cut options in the survey above: 

 * Refundable means that it’s like the federal EITC – you get the credit even if it’s larger than what you owe on your income taxes, in which case you get a rebate. Non-refundable means that you only get it to the extent that you owe something, so no rebate is involved.

*********************************

At the end of the month we published the results from the hundreds of Utahns who took the survey -- see those at our Tax Cut Survey Results page.

The Utah Legislature is considering including $40-$50 million of retiree tax credits in a package of tax cuts this session.  But an important question has arisen as to whether these credits are actually designed properly to help the people that the sponsors say they want to help.

Social Security Tax Credits: SB 11 and HB 86

In his proposed FY22 budget, Governor Spencer Cox wrote that he would like to see "a social security tax credit for low- and middle-income seniors." In the first week of the legislative session, the Utah Senate passed SB 11, including what legislators have described as a Social Security tax credit for low- and middle-income seniors. 

The devil is always in the details with tax legislation.  Unfortunately, a close examination of the details of the Social Security tax credit included in both SB 11 and HB 86, as those two bills are currently drafted, reveals that they fail to achieve their stated objective of providing a tax credit for low- and middle-income seniors.  

According to data from the Office of Legislative Fiscal Analyst, none of the proposed Social Security tax credit goes to low-income seniors (0%).  Almost none goes to moderate income seniors (2%).  About a quarter of it goes to middle-income seniors (27%). But the overwhelming majority of this $18 million tax credit -- over 70% -- goes to the top two-fifths of Utah seniors, those with incomes above $90,000 annually.  The chart below from Voices for Utah Children's January 28th presentation before the House Revenue and Taxation Committee  illustrates who this tax credit is targeted to in its current form by dividing Utah households into quintiles or fifths: 

To better understand how this legislation works, the chart below shows how the credit would be calculated for two eligible households: 

This chart illustrates how the very long phase-out range makes the credit available mostly to upper-income households. The other fault with the bill is that it is not refundable, which means it's not available to lower-income seniors with no state income tax liability, which is likely to include most Utah Social Security recipients. It is certainly good news that our existing tax structures already shield low- and moderate-income seniors from having to pay Utah income tax on their Social Security income, thanks to the Utah Taxpayer Tax Credit and the federal government's treatment of most Social Security income as non-taxable for low-income households. Thus, this credit would need to be refundable in order to help low- and moderate-income Utah seniors by offsetting some of the other taxes they pay, such as property, sales, and gas taxes. 

And, indeed, low- and moderate-income seniors need such assistance. The federal government's official poverty rate for seniors (6.2% or 22,500 seniors, vs. 8.9% for Utah overall & 9.9% for children in 2019) actually understates elderly poverty by roughly 50%, according to the Census Bureau's own Supplemental Poverty Measure. Fully one-fifth of senior couples and nearly half of single seniors have only their Social Security to live on. They could use a tax break. It is very unfortunate that SB 11 and HB 86 do virtually nothing for them, all the more so given the statements from those bills' sponsors and proponents that helping low-income seniors is a central purpose of the bills. In addition, the loss of $18 million of revenue from this tax break that mostly benefits upper-income households will make it harder for the state to provide vital services to seniors in need. 

Military Retirement Tax Credit: SB 11 and HB 161

If the Social Security tax credit offers a fairly stark contrast between stated intent and actual effect, the proposed military retiree tax credit in SB 11 is even more jarring. While this proposed credit shares with the proposed Social Security tax credit that it helps virtually no one in the lowest-income two fifths of Utah retirees, it holds the distinction of being far more skewed toward the top of the income scale. Less than a tenth of it goes to middle-income seniors. Over 90% of this proposed credit goes to retirees in the top two-fifths of the income distribution, most of them with six-figure household incomes. The chart below illustrates this in detail, based on data from the Legislature: 

It is projected that recipients of the tax credit in SB 11 will each receive a credit averaging $1300 annually. This credit will leave Utah with $23 million less each year to invest in education, public health, infrastructure, clean air, or any of the myriad of critically important yet underfunded priorities on Utah's list. Needless to say, that list includes helping Utah's thousands of homeless veterans who, having returned from serving their country, should not find that their state or the nation has any higher priority than helping them get back on their feet.

Thus, while we understand the widespread sentiment that, as a matter of principle, military pensions should never be taxed, we hope that, as a practical matter, policymakers will consider the fact that current state tax law already effectively shields military pensions from the state income tax for low-, moderate, and most middle-income retirees as they prioritize among the various tax cut proposals that they are considering. 

Voices for Utah Children's Tax Policy Priorities 

In all of the tax policy work in which Voices for Utah Children engages, we pursue two priorities that serve our guiding principle that Utah should be a state where all children have the opportunity to achieve their full potential: 

1) Revenue sufficiency: Utah's tax system needs to generate sufficient resources to finance the critically important investments that lay the foundations for the success and prosperity of Utah's next generation, including education, public health, infrastructure, air quality, and other basic needs. While we understand that paying taxes is never politically popular, we are very concerned that the deep tax cutting of the last 25 years, amounting to $2.5 billion annually not available to state and local government budgets and which has left Utah at a 50-year low for our overall level of taxation, has hamstrung Utah's ability to prepare the next generation to meet the challenges they will face. 

2) Tax fairness: Utah's overall tax structure, while improved compared to 25 years ago, remains regressive overall. The highest-income Utahns still pay a lower overall tax rate than low- and middle-income Utahns. In addition, Utah taxes about 100,000 households into or deeper into poverty every year, including a disproportionate share of Utahns of color who already face numerous disparities and obstacles as they endeavor to raise their children and achieve the American dream. To alleviate these inequities, Voices for Utah Children supports policies like the Earned Income Tax Credit (EITC) that enable more Utahns to work their way out of poverty. 

 MEDIA COVERAGE OF THIS ANALYSIS: 

• Salt Lake Tribune
• Fox 13 News

Snow on the mountains, inversions in the valleys, and talk of tax cuts at the Capitol: It must be January in Utah.

Reports are accumulating that the state’s political leaders are looking to make 2021 “the year of the tax cut.” But, as always with taxes, the devil is in the details. What taxes would be cut, and for whom? And how would the revenue losses affect Utah’s children in the long term?

The Utah Taxpayers Association is proposing a cut in the income tax rate, which means the benefit goes overwhelmingly to the top of the income scale. Utah’s income tax is our only tax that is not a regressive tax. It’s the only one that actually reflects Utah’s income distribution. Three-fifths of all Utah income is earned by the top one-fifth of taxpayers (perhaps these are the taxpayers that the Association speaks for), and three-fifths of the income tax is paid by that same top one-fifth of taxpayers. Four-fifths of it is paid by the top two-fifths.

Cutting the income tax rate is a tax cut for those who don’t need one. It’s a tax cut for those among us who thrived over the last year despite the pandemic and recession -- and are, by all accounts, ready, willing, and able to do their part to help their fellow Utahns who were not so fortunate.

Because the truth is that not all Utahns are in a great spot right now. Poverty and unemployment remain elevated. Hunger has increased. Homeless shelters are full and encampments large and small have appeared all along the Wasatch Front. Nearly half of Utah parents lost income last year, and a third feared eviction or foreclosure as a result, according to the U.S. Census Bureau’s Household Pulse Survey.

And for all these indicators of distress, the disparities between different ethnic and racial groups are stark. For example, the Census surveys found that Latino Utah parents were 10-23 percentage points more likely to have lost income than White Utah parents, and 2-3 times as likely to not have enough food to eat.

The Census surveys also found a digital divide, with about a tenth of Utah children lacking consistent access at home to internet or to a digital device for educational purposes.

Health indicators tell a similar story. Between 2016 and 2019, even before the arrival of the coronavirus pandemic, our rate of uninsured children increased from 6% to 8.3%, from 59,000 to 82,000. We now rank among the worst in the nation, 46th place, when it comes to insuring our kids – and last in the nation for insuring Hispanic children for the third year in a row.

Certainly refundable tax credits like a Utah Earned Income Tax Credit (EITC) targeted to those in greatest need should be part of our response to the economic distress brought about by the pandemic. But tax cuts for middle- and upper-income Utahns would reduce our ability to make the investments in Utah’s future that are the key to our children’s prosperity and success.

The Taxpayers Association’s argument that “tax relief for Utah taxpayers is long overdue” ignores the reality that “Utah taxes are relatively low — lower now than in many years,” as Zions Bank CEO Scott Anderson wrote a year ago in the Deseret News. Data from the Utah State Tax Commission finds that our overall level of taxation is at a 50-year low, following repeated rounds of tax cutting. Voices for Utah Children has found that these tax cuts have reduced annual revenue by 18% over the last 25 years, adding up to an annual total of $2.4 billion.

Last year at this time, a broad and diverse coalition of Utah advocates for the poor, for persons with disabilities, for education, health care, clean air, and for a variety of other popular Utah priorities came together on the steps of the Utah Capitol calling on the Utah Legislature to avoid cutting taxes until it developed a comprehensive plan to address Utahns’ top concerns by investing in Utah’s future.

Last year at this time, Utah policymakers wisely concluded that the economic outlook was too uncertain to take a risk with tax cuts. We know the state’s political leadership wants what is best for Utah. Is the outlook for 2021 truly so certain that we can now give in to the tax cut temptation? Would this be the fiscal prudence for which Utah has been so widely recognized nationally?

With Amendment G winning 54% of the vote this month, many of our partners and supporters have been asking us: What’s going to happen next?

What changes will result from this Constitutional amendment going into effect January 1, 2021, along with the legislation triggered by it (HB 357)?

The short answer is, “Probably not a lot, at least not immediately, but possibly quite a bit over the long term.”

As a result of the passage of Amendment G, the Utah Constitution Article XIII, Section 5, paragraph 5 changes from

“All revenue from taxes on intangible property or from a tax on income shall be used to support the systems of public education and higher education as defined in Article X, Section 2.”

to the following:

“All revenue from taxes on intangible property or from a tax on income shall be used:

(a) to support the systems of public education and higher education as defined in Article X, Section 2; and

(b) to support children and to support individuals with a disability.”

The state’s budget leaders sought this change because they expect the long-term trend to continue of Utah’s higher education budget shifting from the General Fund (which is financed mainly by the sales tax) to the Education Fund (which is financed mainly by the income tax). This shift has made it possible to make more of the General Fund available for social and healthcare services. But once higher ed has shifted completely out of the General Fund, something expected to happen in the coming years, then budget writers will no longer have a mechanism to free up additional funds to meet the state’s obligations for healthcare and social services. This concern is what drove the decision to place on the ballot a Constitutional amendment to allow budget writers to begin to shift additional items (services for children and for Utahns with disabilities) out of the General Fund and have them financed by the income tax.

In the FY21 budget passed by the Legislature in March and then adjusted in June (the FY21 budget year runs from July 1, 2020 through June 30, 2021), just 4% of the higher education budget came from the General Fund and the remaining 96% from the Education Fund. The chart below shows how the higher education budget has been divided between the two funds in recent fiscal years:

Source: Office of Legislative Fiscal Analyst annual publication “Budget of the State of Utah” at https://le.utah.gov/asp/lfa/lfareports.asp?src=LFAAR

While the trend has not been a straight line, the general direction has been to shift the higher education budget out of the General Fund and into the Education Fund. And, indeed, two of the last three budgets have seen 96% of the higher education budget come out of the Education Fund.

This trend has also been facilitated by the fact that income tax revenue has been growing faster than sales tax revenue.

Assuming these trends continue, we can expect to see the FY22 and future year budgets begin to make gradually increasing use of income tax revenue to finance social and healthcare services for children and Utahns with disabilities, two items that until now were only funded from sales tax revenue (through the General Fund).

What will be the impact of Amendment G on education funding?

As part of the political deal that produced Amendment G, the Legislature passed HB 357, with implementation contingent on voter approval of Amendment G. HB 357 contains three main provisions intended to provide education advocates with compensation for losing the Constitutional earmark of the income tax for education:

• It requires that “when preparing the Public Education Base Budget, the Office of the Legislative Fiscal Analyst shall include appropriations to the Minimum School Program from the Uniform School Fund… in an amount that is greater than or equal to:

(a) the ongoing appropriations to the Minimum School Program in the current fiscal year; and

(b) … enrollment growth and inflation estimates…”

This is intended to avoid what happened in the Great Recession a decade ago, when annual appropriations were not sufficient to keep up with inflation and enrollment growth, and it took almost a decade to restore real per-student education appropriations.

• It requires that 15% of education revenue growth go into a new “Public Education Economic Stabilization Restricted Account” to be saved for recessions until it reaches 11% of the full Uniform School Fund. This is intended to build up a new reserve fund of about $400 million to finance the first commitment mentioned above, the commitment that education funding will always increase by enough to cover enrollment growth and inflation, even in times of recession. This new annual 15% savings requirement will mean smaller education funding increases in good times and larger ones in bad times, in effect smoothing out the annual changes in education funding. It does not change the overall amount available for education budgets over the full course of each economic cycle.
• HB 357 allows local districts to reallocate capital funds to cover operating expenses in recession years. This is something that was allowed on a one-time basis in the Great Recession a decade ago. Now it will be allowed in any year when the Legislature makes use of the new Public Education Economic Stabilization Restricted Account.

What impact will Amendment G and HB 357 have on funding for social and healthcare services for children?

On the positive side, budget writers will now have increased flexibility to use income tax revenues that are now going to education for social and healthcare services for children and Utahns with disabilities. On the negative side, there are no new revenue streams and no rolling back of past tax breaks, and HB 357 does promise an increased commitment to education in recession years (presumably including the current one), so that seems to imply that there will be less available for everything other than education, at least in the short term.

What impact will this have in the coming year?

This depends on how much revenue there is. Will there be enough new education revenue to cover inflation and enrollment growth? And if not, how will the state budget cover that commitment supposedly contained in HB 357 since the new Public Education Economic Stabilization Restricted Account does not yet have any money in it? The Legislature may face the same difficult choices as in the last recession a decade ago between funding enrollment growth and inflation in the education budget or funding life-saving social and healthcare services. And if they choose to keep their promise to fund enrollment growth and inflation in the education budget in the absence of sufficient education revenues, then that commitment will come at the expense of other areas of the state budget, such as social and healthcare services for children.

One wild card here is the question of how the calculations will be impacted by the unprecedented drop in student enrollment that was reported this fall. Student enrollment had been projected to grow by 7,000; instead it fell by over 2,000. This drop is probably a temporary blip due to the impacts of the COVID-19 pandemic. But the Legislature may see it as an opportunity to go with a low-ball estimate of enrollment for FY22 when it meets to pass that year’s budget this coming winter. Doing so would certainly make it easier to keep its commitment to fund enrollment growth and inflation even in the current downturn.

What impact will this new arrangement have in the longer term?

On the negative side, the fact that Amendment G and HB 357 provide for no new revenue streams to roll back any of what now amounts to $2.4 billion every year in tax breaks enacted since 1995 (18% of public revenues) does not bode well for education, for social and healthcare services for Utahns in need, or for any of the many areas of state responsibility that suffer from chronic revenue shortages because of these revenue losses.

On the positive side, the promise made by the state’s leaders to always at least fund inflation and enrollment growth could potentially lead to an increased commitment of existing state resources to education than might have otherwise taken place. If that happens, and since the need for resources in other areas is not going to change, there is the possibility that members of the state’s budget leadership might move closer to public opinion, which has expressed consistent -- and growing -- willingness to pay more to achieve improvements in areas of state responsibility like education, transportation, and air quality, as evidenced by the results of the following public opinion surveys this year:

• Deseret News
• Utah Foundation
• Envision Utah

If that happens, then we will be able to say that Amendment G led to positive changes in state fiscal policy for the benefit of all of Utah’s children. But if not, then we may well be in for many years of budget writers using their newfound flexibility to grant substantial increases to one area of the budget one year and another the next, making different areas of the budget compete with each other to be that year’s “favored child,” but leaving none better off in the long run.

THIS PAPER IS ALSO DOWNLOADABLE AS A PDF HERE.

WE ALSO PRESENTED THIS PAPER AS A SLIDESHOW ON A FACEBOOK LIVE EVENT: https://www.facebook.com/watch/live/?v=380455343223086&ref=watch_permalink 

(view this as a pdf here)

The state's leading child research and advocacy organization Voices for Utah Children announced its opposition to Constitutional Amendment G in an online press conference today (Monday, October 5, 2020).  

Constitutional Amendment G is the proposal to amend the Utah State Constitution to end the Constitutional earmark of all income tax revenues for education.  Since 1946 Utah has dedicated 100% of income tax revenues to education, initially defined only as K-12 education and, since 1996, including also higher education.  The State Legislature voted in March to place on the ballot the question of also allowing these funds to be used for other purposes -- specifically for programs for children and for Utahns with disabilities.  

The arguments made by proponents and opponents are summarized in an online document prepared by the state election administrators in the Lt Governor's office. According to that document, "the state spends about $600 million annually of non-income tax money on programs for children and programs that benefit people with a disability."

Voices for Utah Children CEO Maurice "Moe" Hickey explained the organization's decision to oppose the Amendment: "We believe that the proposed Amendment not only won’t solve Utah’s state budget woes, it is likely to delay the real fiscal policy changes that are needed. Over the past decade we have been continuously ranked last in the country for per pupil spending. This is a caused by our growth in number of students, combined with a lowered tax burden in the past decade. A major question we have to ask is “if the current Constitutional earmark has failed to help Utah invest more in education, how will getting rid of it improve matters?” The unfortunate reality is that getting rid of the Constitutional earmark of income tax for education does nothing to solve the real problem, which is the fact that nearly every area of state responsibility where children are impacted – education, social services, public health, and many others – is dangerously underfunded."

Health Policy Analyst Ciriac Alvarez Valle said, "Utah has one of the highest rates of uninsured children in the country at 8% or 82,000 children, and we have an even higher rate of uninsured Latino children at almost 20%. It is alarming that even during this pandemic, children and families are going without health insurance. There are so many ways to reverse this negative trend that began in 2016. Some of the solutions include investing in our kid’s healthcare. By investing in outreach and enrollment efforts especially those that are culturally and linguistically appropriate for our communities of color, we can ensure they are being reached. We also have to invest in policies that keep kids covered all year round and ensures they have no gaps in coverage. and lastly, we have to invest in covering all children regardless of their immigration status. By doing these things we can ensure that kids have a foundation for their long term health and needs. It's vital that we keep children’s health at the forefront of this issue, knowing that kids can only come to school ready to learn if they are able to get the resources they need to be healthy."

Health Policy Analyst Jessie Mandle added, "All kids need to have care and coverage in order to succeed in school. We are no strangers to the funding challenges and the many competing demands of social services funding. Without greater clarity, more detail, and planning, we are left to ask, are we simply moving the funding of children’s health services into another pool, competing with education funding, instead of prioritizing and investing in both critical areas? Sufficient funding for critical children’s services including school nurse, home visiting and early intervention, and school-based preventive care remains a challenge for our state. We have made important strides in recent years for children’s health, recognizing that kids cannot be optimal learners without optimal health. Let’s keep investing, keep moving forward together so that kids can get the education, health and wraparound services they need."

Education Policy Analyst Anna Thomas: "We often hear that UT is dead last in the nation in per pupil funding. We have also heard from such leaders as Envision Utah that millions of dollars are needed to avert an urgent and growing teacher shortage. What we talk about less is the fact that these typical conservative calculations of our state’s underfunding of education don’t include the amount the state should be paying for the full-day kindergarten programming most Utah families want, nor does it include the tens of millions our state has never bothered to spend on preschool programs to ensure all Utah children can start school with the same opportunities to succeed. Utah currently masks this underfunding with dollars from various federal programs, but this federal funding is not equitably available to meet the needs of all Utah children who deserve these critical early interventions. The state also increasingly relies on local communities to make up the difference through growing local tax burdens - which creates an impossible situation for some of our rural school districts, where local property tax will never be able to properly fund early interventions like preschool and full-day kindergarten along with everything else they are responsible for. Our lack of investment in early education is something we pay for, much less efficiently and much less wisely, later down the road, when children drop out of school, experience mental and physical health issues, and get pulled into bad decisions and misconduct. If kids aren’t able to hit certain learning benchmarks in literacy and math by third grade, their struggles in school - and often by extension outside of school - multiply. We should be investing as much as possible in our children to help ensure they have real access to future success - and can contribute to our state's future success. You don’t have to be a math whiz - third grade math is probably plenty - to see that the general arithmetic of Amendment G, and the attendant promises of somehow more investment in everything that helps kids - just doesn’t add up. We have multiple unmet early education investment obligations right now. Beyond that, we have many more needs, for children and for people with disabilities, that we must be sensitive to as a state especially during a global pandemic. How we will ensure we are investing responsibly in our children and our future, by having MORE expenses come out of the same pot of money - which the legislature tells us every year is too small to help all the Utah families we advocate for - is still very unclear to me. Until that math is made transparent to the public, we have to judge Amendment G to be, at best, half-baked in its current incarnation."

Fiscal Policy Analyst Matthew Weinstein shared information from the Tax Commission (see slide #8) showing that Utah's overall level of taxation is now at its lowest level in 50 years relative to Utahns' incomes, following multiple rounds of tax cutting. He also shared recent survey data from the Utah Foundation showing that three-fourths of Utahns oppose cutting taxes further and are ready and willing to contribute more if necessary to help solve the state's current challenges in areas like education, air quality, and transportation. He also contrasted the public's understanding that there's no "free lunch" with the unrealistic election-year promises made by our political leadership -- more money for both education and social services if the public votes for Amendment G -- even though Amendment G does nothing to reverse any past tax cuts and address the state's chronic revenue shortages.

The organization shared a one-page summary of the arguments (available here in pdf format) for and against the proposed Constitutional Amendment: 

Voices for Utah Children has also published a full five-page position paper that is available in pdf format. 

This press conference was broadcast live at

Media coverage: 

• Deseret News
• KSL
• Cache Valley Daily  
• St. George Spectrum 
• KUTV-2
• Op-eds: Salt Lake Tribune   Ogden Standard-Examiner

Every day, our state and federal governments raise and spend tax revenue in ways that profoundly affect families and children. Choices states make about investing in schools, health care, child care, and other services can either help create opportunity and prosperity for people or hold them back.

Voices for Utah Children works to fight poverty by examining Utah's tax and budget policies and analyzing their impact on children, particularly those from low- and moderate-income families that are most at risk for not completing their education or otherwise not achieving their full potential. We identify evidence-based fiscal strategies to strengthen struggling families, often by means that save taxpayers money in the long run.

Economic Growth, Taxes, and Investments in Families and Children

Taxes: Every year, Utah's taxes (income, sales, gas, and property taxes) generate revenues that government then expends in ways that profoundly affect families and communities. The fiscal choices Utah makes — such as whether to invest in Utah's future or give in to the temptation to cut taxes below their current overall low level — will make a critical difference in the lives of the next generation of Utahns. If we make the best choices, we can help foster opportunity for all our children and lay the foundations for Utah's future growth and prosperity.

Recently the Utah State Tax Commission and the Utah Foundation both published research showing that taxes in Utah are the lowest that they have been in 30-50 years, following repeated rounds of tax cutting. Tax cutting is thought to be popular, especially in election years, but is it always wise? At some point we need to ask ourselves a difficult question: Is the current generation of Utahns doing our part, as earlier generations did, to set aside sufficient resources every year to invest in our children, in our future, in the foundations of our children's prosperity and quality of life? And more immediately and specifically, given the Coronavirus Recession's expected impacts on the Utah state budget, should we reconsider the 2018 election-year decision to reduce our income tax rate from 5% to 4.95%, a $50 million tax cut that mostly benefitted high-income households? 

The supposed popularity of tax cutting has been called into question by 2020 polling data. For example, during the 2020 legislative session, the Deseret News found that only 10% of Utahns thought that the expected Education Fund surplus should be used for tax cuts rather than enhanced education investment. And the Utah Foundation found similar results in their election issue survey -- less than one-quarter of Utahns support tax cuts that erode the state's ability to deliver the services Utahns need, while "74% of Utahns were willing to increase their taxes for a specific benefit" (either education, transportation, or air quality). 

Voices for Utah Children's fiscal policy program works to ensure that we invest sufficient resources to ensure that our kids get world-class education and health care as well as special support for children most in need.

At the same time, we also work to ensure that public revenues are generated in ways that are fair. No family should be taxed into poverty as the price of educating their children. Currently, while we've moved in a better direction over the past 25 years, Utah does tax about 100,000 families into or deeper into poverty every year. In addition, the lowest-income Utahns pay a higher overall tax rate (7.5%) than those with the highest incomes (who pay 6.7% of their incomes in state and local taxes). That's one of the reasons why Voices for Utah Children supports making Utah the 30th state in the nation with our own Earned Income Tax Credit (EITC), starting with Utahns working their way out of intergenerational poverty. 

Economic Performance: Voices for Utah Children examines and reports on Utah's economic performance from the perspective of how low- and moderate-income Utahns experience the economy -- some examples appear in the links below: 

Why Utah Should Invest In Our Future, Not Tax Cuts

Voices for Utah Children's Assessment of the Positive and Negative Aspects of the December 2019 Tax Restructuring Effort

Why Should Utah Become the 30th State with Our Own Earned Income Tax Credit (EITC)?

The History of Tax Incidence in Utah 1995-2018   

Inequality in Utah Compared to Other States and the Nation

Utah Working Families Economic Performance Benchmarking Project: Utah vs. Idaho

We work to equip lawmakers, journalists, advocacy organizations, other nonprofit service providers and the public with unassailable information that will help children get a quality education, help families get medical care, and help working people get the support they need to build a better life for their children.