Budget Surplus In Utah Spurs Tax-Cut Plans

By Nancy Mathis — September 20, 1989 2 min read

Utah legislators, anticipating an $80-million budget surplus, were scheduled to convene this week for a special session to consider tax cuts strongly opposed by education groups.

Teachers'-union leaders plan to work to delay consideration of any tax-cut bill until the regular session in January, in the hope of being able at that point to steer some of the surplus to education programs.

But legislative leaders said last week that passage of a tax-cut measure during the special session was virtually inevitable.

“We’ve committed ourselves to it; we just haven’t decided how,” said Senator Haven J. Barlow, co-chairman of the joint education-appropriations committee.

Gov. Norman H. Bangerter, who called for the special session, has proposed a $20-million reduction in the income tax. Other legislative proposals call for greater cuts in the income tax, a sales-tax exemption for food, and property-tax cuts.

“I feel it’s safe to say a majority of legislators are in favor of a tax cut,” said Representative Richard Bradford, also co-chairman of the education-spending panel.

Dee Burningham, a lobbyist for the Utah Education Association, said the association wants lawmakers to postpone action until the regular session, when they will be able to compare the impact of tax cuts with spending needs.

“Now all they are looking at is the tax-cut angle,” he said.

James Campbell, president of the uea, said that instead of cutting taxes to reduce the surplus, legislators should give the money to education in order to make up for ground lost in recent years.

Teachers, Mr. Campbell noted, have not had significant pay increases in the past three years. And any increases in spending for the public schools have evaporated with Utah’s tremendous enrollment growth, he argued.

“There are lots of angry teachers who would like to walk out,” Mr. Campbell said.

Senator Barlow said his strategy would be to keep any tax-reduction measure as small as possible. “We need some sort of symbolic reduction,” he said.

Both legislators and educators said that the state’s unusual demographic characteristics, including one of the highest birth rates in the nation, have contributed to the schools’ financial problems.

Nationally, there are four taxpayers for every schoolchild, they noted. But in Utah, they said, the situation is reversed, with one taxpayer for every four schoolchildren.

Although voters last year rejected a proposal to reduce taxes, the pressure for tax relief has continued, legislators said.

Also during the special session, lawmakers will consider a bill to remove the income-tax exemption provided to state-government retirees.

The measure is in response to a U.S. Supreme Court ruling last spring that requires equal tax treatment of state and federal retirees. Federal retirees’ benefits are not tax-exempt in Utah.

Mr. Bradford said legislators probably will act to increase the benefits of state retirees in order to offset the loss of the exemption.

A version of this article appeared in the September 20, 1989 edition of Education Week as Budget Surplus In Utah Spurs Tax-Cut Plans