Tax and Budget

We appreciate the many legislators that supported bills affecting children. In summary, it WAS a good year for kids, but we still have plenty to do and we look forward to working together to #investinutahkids!

Early Childhood

Early childhood care and education had several key wins. The legislature approved:

  •  $7m in new funding for Optional Enhanced Kindergarten (which many districts use, with other funding sources, to offer full-day kindergarten)

  • $3m in new funding for School Readiness grants (to support high-quality preschool programs)

  • $5m in newly restored funding for preK-3 teacher professional development.

  • In addition, new legislation directed expansion in eligibility for working families to receive state childcare support, and several bills aimed to create efficiencies and financial stability for the childcare providers these working families rely on. 

Juvenile Justice

In the area of Juvenile Justice, legislators approved several bills that continue the state’s effort to refine ongoing efforts to reform and improve the juvenile justice system, which included:

  • A bold bill outlining and clarifying the Miranda rights of youth who are interrogated by police (ensuring that either parents or attorneys are present for such questioning.

  • An innovative pilot program to offer youth in secure care access to college courses through Dixie State University.

  • Finally, school-based discipline and the role of School Resource Officers (SROs) received some attention, with legislators giving a moratorium on criminal enforcement of state truancy laws during the remaining months of the pandemic and providing additional direction with regard to SRO training in public schools. 

Health

We were thrilled to see our Legislature take significant steps to prioritize children’s health coverage this Session and reduce Utah’s too-high number of uninsured children.

  • House Bill 262 (Representative Welton) provides ongoing funding for CHIP/Medicaid outreach so that more families can connect with affordable health insurance options for their kids. In addition, Senate Bill 158 would have removed barriers to health insurance, so all Utah children could get covered and keep their coverage.

  • In addition to children’s coverage, we saw important steps forward for children’s access to mental health this legislative Session including HB 337, sponsored by Representative Eliason, which will allow more early childhood providers to receive valuable training in infant mental health and also strengthen statewide systems to respond to the mental health needs of young children.

  • The legislature also made changes to ensure that funding for Utah’s maternal mental health program and awareness campaign were made permanent; thanks to Representative Dailey-Provost for championing this change for families.

  • Finally, the legislature also passed a bill that will make it easier for kids to access preventive dental health care. Senate Bill 103, sponsored by Senator Todd Weiler, allows dental hygienists to bill Medicaid, which will help promote greater access to dental care in school-based and childcare settings. 

Cover All Kids Campaign Update

Senate Bill 158 passed the Senate with broad support, but unfortunately it was not funded. We look forward to continuing to support the bill sponsor, Senator Luz Escamilla, and floor sponsor, Representative Francis Gibson, to get this important bill across the finish line next year.

Continuous Medicaid Eligibility Update

Unfortunately, the Legislature did not restore state funding for continuous eligibility for children on Medicaid ages 0-5. Continuous eligibility was funded in the 2020 General Session but eliminated as part of budgetary cuts over the summer. Continuous eligibility guarantees children will have a year of stable Medicaid coverage, as they already have with CHIP. The good news is that thanks to temporary federal requirements, all children currently have this option. However, when the federal public health emergency ends, this option will end too, which could lead to significant loss and disruptions in children’s coverage if state funding is not restored. This past year has shown us just how vital it is that all children and families across Utah have access to health care and coverage. Stable, affordable health coverage for all Utahns will be critical to our state’s ability to rebound and recover.

Other Legislative Priorities 

During this past legislative session, we were happy to support a number of bills that are “good for kids” outside of our main policy priorities including the following bills that include policies that we will continue to work on this upcoming year!

  • We supported and are glad to continue working with the International Rescue Committee on supporting our immigrant and refugee families through HCR 22: Concurrent Resolution Celebrating the Contributions of Multilingual and Multicultural Families to Utah Schools. 
  • HB 338: School District Voter Eligibility Amendments would have created a pathway for school districts to choose whether students age 16-17 can vote in their local elections. It was led by a young person, Dhati Oomen, but unfortunately did not pass. We will continue to further advocate for greater youth civic engagement through this bill and beyond.

  • Lastly, we supported and advocated for SB 214: Official Language Amendments as a positive first step to ensure we have greater language inclusion in our state. While we recognize that this is not a full repeal of the 2000 “English-only” law, this bill does remove funding restrictions and “official communications that exist” while keeping English as the official language in place.  We will continue to work on ensuring this law is repealed completely in the coming year.

Tax and Budget

Tax cuts were a big item of discussion, and there were three tax cuts passed:

  • There was an $18 million Social Security Income Tax Credit

  • $24 million Military Retirement Income Tax Credit

  • $55 million Tax Cut tied to the personal exemption related to the dependent tax credit.  

Voices opposed these three items as they were primarily a benefit to the top 40% of taxpayers and excluded the lowest-income 40% almost entirely.  

We were also advocating for a $7 million Earned Income Tax Credit equal to 10% of the federal EITC targeted to Utahns in intergenerational poverty. This was passed in December 2019 as part of the tax restructuring law that was repealed in the 2020 Session. Lastly, there were two bills to lower the State Income Tax Rate, which did not pass. We were opposed to both bills for a number of reasons.  The cuts would have led to a more regressive tax structure and depriving us of much needed future revenues.

We have many unfunded needs and it is our opinion that we should not cut taxes any further until we address those needs and provide the required funds.

>> Check out our Facebook page for FB Live updates of each policy area. 

Published in News & Blog
February 24, 2021

The High Price of Lower Taxes

Legislative leaders have said that 2021 should be “the year of the tax cut.” Numerous public opinion surveys show that Utahns disagree. This may come as a surprise to policymakers, who have been in the habit of handing out tax break after tax break for decades.

But there seems to be an increasing public awareness that Utah is now paying a price for decades of tax cutting that have left us with the lowest overall tax level in 50 years relative to Utah personal income.

UTAH'S URGENT UNMET NEEDS

We all like being able to pay less in taxes. But there is a growing understanding that tax cuts are leaving us unable to address the long list of urgent unmet needs in education, infrastructure, social services, air quality, public health, and many other areas that affect our standard of living and quality of life. All of these issues will shape the Utah that our children will one day inherit. 

Outlined below are some examples of the urgent unmet needs in Utah. 

Early Care and Education

Amount

Unmet Need

$500-600 Million/Year

Envision Utah estimates that we need to invest an additional $500-600 million each year just to reduce teacher turnover, where we rank among the worst in the nation. 

Our leaders’ unwillingness to solve our education underinvestment problem is why our high school graduation rate is below the national average (after adjusting for demographics) and our younger generation of adults (age 25-34) have fallen behind their counterparts nationally for educational attainment at the college level (BA/BS+).

$52.5 Million/Year Voices for Utah Children estimates that it will cost $52.5 million to make full-day Kindergarten available to all Utah families who would choose to opt in to it.
$1 Billion Well over $1 billion is one estimate for a much needed comprehensive system of early childhood care and education (pre-k) in Utah.

 

Health

Amount

Unmet Need

$59 Million/Year

It would cost Utah about $59 million each year to cover all of our 82,000 uninsured children.

The longstanding preference for tax cuts over covering all kids is why we rank last in the nation for covering the one-in-six Utah kids who are Latinx and why the state as a whole ranks in the bottom 10 nationally for uninsured children.

 

Human Services

Area 

Unmet Need

Mental Health & Substance Abuse Treatment

Utah ranks last in the nation for mental health treatment access, according to a 2019 report from the Gardner Policy Institute.

A 2020 report from the Legislative Auditor General found that Utah’s Justice Reinvestment Initiative had failed to achieve its goal to reduce recidivism -- and actually saw recidivism rise -- in part because “both the availability and the quality of the drug addiction and mental health treatment are still inadequate.” (pg 51)

Disability Services

The DSPD disability services waiting list has doubled in the last decade from 1,953 people with disabilities in 2010 to 3,911 in 2020.

The FY20 $1 million one-time appropriation made it possible to provide services to 143 people from the waiting list.  

Domestic Violence The Utah Domestic Violence Coalition 2017 Needs Assessment identified insufficient funding for shelters, affordable housing, child care, legal representation, and mental health and substance abuse treatment services as major obstacles to protecting women from domestic violence. 
Seniors

The official poverty measure undercounts senior poverty by about a third because it does not consider the impact of out-of-pocket medical expenses.

2018 study found that seniors spent $5,503 per person on out-of-pocket medical expenses in 2013, making up 41% of their Social Security income. (For most seniors, Social Security is the majority of their income, and it makes up 90% or more of income for 21% of married couples and about 45% of unmarried seniors.)  

 

Infrastructure, Environment, and Housing

 Area

Unmet Need

Infrastructure

The American Society of Civil Engineers gives Utah a C+ grade for infrastructure in its December 2020 report

The Utah Transportation Coalition has identified a funding shortfall of nearly $8 billion over the next two decades.

Air Quality  The Wasatch Front ranks as the 11th worst air quality in the nation for ozone and 7th worst for short-term particle pollution
Housing

Affordable housing units fall 41,266 units short of meeting the need for the 64,797 households earning less than $24,600. Among extremely low-income renter households, 71% pay more than 50% of their income for housing, which is considered a severe housing burden.

The FY21 affordable housing appropriation request for $35 million from Sen. Anderegg, which was already just a small step in the right direction, was reduced to just $5 million.

 

WHY TAX CUTS ARE A BIG DEAL

Some legislators have said to us, "What's the big deal with $100 million of tax cuts out of a $22 billion budget?".

The big deal is that we’ve been cutting, on average, about $100 million every single year for the last 25 years.

Voices for Utah Children’s research has found that tax cuts from the last 25 years has left us short $2.4 billion each year, amounting to an 18% cut to public revenues.

One could even call us a “slow-motion Kansas” because in 2012 they cut taxes overnight by 15%, leading to an economic slump and political backlash that saw the Republican legislature reverse the cuts in 2017 and the public elect a Democratic governor in 2018.

But here in Utah, we’re like the proverbial frog in the pot of water heating on the stove. The devastating impacts of these revenue reductions have been slow and incremental, so we’ve come to accept as normal a state of affairs that Kansans quickly reversed.

Instead of figuring out the fairest way to restore some of those lost revenues so we can address our most urgent challenges, Utah’s political leadership continues to pass new tax cuts every year, generally skewed toward the top of the income scale.

For example, Voices for Utah Children analyzed two of the tax cuts proposed this year and found that they excluded lower-income Utahns completely and mostly went to the highest-income households – even though their supporters said publicly that they are intended to help low- and middle-income Utahns.

Public opinion surveys conducted last year by the Deseret News and Hinckley Institute, by the Utah Foundation, and by Envision Utah all found a strong popular preference for public investment over tax cuts.

Same thing with surveys this month by the Deseret News-Hinckley Institute and by Voices for Utah Children.

Breaking old habits can be hard. As is often the case, the public appears to be ahead of our political leaders. But let's hope that they too will eventually come to appreciate the wisdom of their constituents, who are increasingly aware of the high price Utah is paying for lower taxes.


Utah has been fortunate in weathering the current recession. This gives us a unique opportunity to be able to make smart long-term investments at a time when other states are cutting budgets. As a State we need to take advantage of this situation and invest in Utah kids, not tax cuts.

THIS OP-ED APPEARED IN THE SALT LAKE TRIBUNE ON MARCH 1, 2021

Published in News & Blog
February 22, 2021

Tax Cut Survey Results

Tagged under
January 31, 2021

Tax Cut Survey

Tagged under

Salt Lake City - Voices for Utah Children released publicly today (January 6, 2021)  "#InvestInUtahKids: An Agenda for Utah's New Governor and Legislature," the first major publication of our new #InvestInUtahKids initiative. 

Utah begins a new era in this first week of January, with the swearing in of a new Governor and Lt. Governor and a new Legislature. The arrival of 2021 marks the first time in over a decade that the state has seen this kind of leadership transition. Last month Voices for Utah Children began sharing with the Governor-elect and his transition teams the new publication, and on Wednesday morning Voices will share it with the public as well.

The new publication raises concerns about the growing gaps among Utah's different racial, ethnic, and economic groups and lays out the most urgent and effective policies to close those gaps and help all Utah children achieve their full potential in the years to come in five policy areas: 

  • Early education 
  • K-12 education 
  • Healthcare
  • Juvenile justice
  • Immigrant family justice

The report, which was initially created in December and distributed to the incoming Governor and his transition teams, closes with a discussion of how to pay for the proposed #InvestInUtahKids policy agenda. The pdf of the report can be downloaded here

Published in News & Blog

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:

Higher ed GF EF 2014 2021

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:

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 

Published in News & Blog