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Push to raise Utah income tax to help schools moving ahead

By Michelle L. Price, Associated Press  |  Posted Mar 18th, 2017 @ 10:48pm


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SALT LAKE CITY (AP) — A group backed by business leaders said this week they plan to move ahead with a push to get Utah voters to raise the state income tax to generate an extra $750 million annually to address a teacher shortage, crowded classrooms and other school needs.

Officials with the group Our Schools Now said they appreciate an extra $120 million lawmakers put in the new budget toward enrollment growth and teacher pay this year, but said it's not enough.

They plan to start gathering signatures this summer for a ballot initiative that would ask voters in 2018 to raise the individual income tax rate seven-eights of a percentage point. That would raise the rate to 5.785 percent, up from 5 percent.

The group has powerful, well-funded backers, including Zions Bank CEO Scott Anderson, Questar CEO Ron Jibson and Gail Miller, whose family owns the Utah Jazz.

Legislators who oppose the effort but fear it could end up before voters next year instead passed a law this year that will require the initiative to let people know that the initiative amounts to a 17.5 percent increase.

Utah's Republican legislators and Gov. Gary Herbert have not supported the proposal, saying raising Utah's income tax rate would hurt the state's ability to compete for companies looking to open offices or relocate.

Utah's rate is already slightly higher than the rate in their neighboring state and rival, Colorado, and much higher than Nevada and Wyoming, which don't have any income tax.

But the Republican governor appeared more open to it on the last night of the legislative session. In an interview with The Associated Press, Herbert said that while he's concerned about consequences to Utah's economy, the tax increase is an option on the table and would create new revenue "in one fell swoop."

"It ought to be considered. And I would encourage them to continue to move ahead," said Herbert, adding the ballot initiative is keeping pressure on legislators to look at tax policy.

During the recently completed legislative session, GOP legislators offered an alternative to generate more funds for education: Broadening the tax base. That could include taking steps to ensure sales tax is collected from online purchases and scaling back tax exemptions and credits.

Lawmakers toyed with the idea of passing major tax reforms but couldn't get a plan together before their short, 45-day session ended on March 9. They've instead pledged to spend their off-season this summer studying Utah's tax policies to see what improvements can be made.

While legislators do that, Our Schools Now organizers this summer will start gathering the 113,000 signatures they need to have by April 2018 to get on the ballot next fall, according to campaign manager Austin Cox.

The extra money Utah legislators sent to schools this year include $116 million to increase basic per-student funding, known as the weighted pupil unit (WPU). The changes would raise that amount to $3,311, up from its current level of $3,184 — a 4 percent increase generally celebrated by Utah legislators, the governor and education officials.

Our Schools Now said the boost is great, but that the state needs more long-term solutions to help with a teacher shortage and Utah's place among the lowest per-pupil K-12 education funding in the country.

The organization said the tax increase would generate roughly a 26 percent increase every year in the weighted pupil unit.

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