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SALT LAKE CITY — A GOP-sponsored bill that would increase the personal income tax rate in Utah by 1 percent, collecting an added $585 million for education each year, has incited debate among lawmakers, educators and policy advocates.
Descriptions of the bill range from "brave" to "misguided," but bill sponsor Rep. Jack Draxler, R-North Logan, said the bill is more than an attempt to spark discussion.
"This is not a trial balloon. It is an important measure to address an urgent need, a critical need in our state," Draxler said during an Education Task Force meeting Tuesday. "It's time to have this discussion. For too long we have danced around this issue."
The Public Education Increased Funding Program, which is still being drafted, would increase the income tax rate from 5 percent to 6 percent. Seventy-five percent of collected funds would be devoted to performance-based salary raises for classroom teachers. The other 25 percent would fund technology training and instruction programs.
Ten percent of both funds would be allocated to district and charter schools, as well as schools for the disabled, on an equal basis to ensure that small schools benefit. The remaining 90 percent would be distributed on a per-student basis.
Salary increases would be administered based on teacher performance and would not include administrative personnel.
What this does is it rewards exceptional teachers, and it encourages those who are good or average to get to that point.
–Rep. Jack Draxler, R-North Logan
"What this does is it rewards exceptional teachers, and it encourages those who are good or average to get to that point," Draxler said.
If the bill were to pass, median income taxes would increase for single taxpayers by $280 each year. Homeowning families of four would see a tax increase of $575. Six-person families with a home would pay an extra $660.
The bill would take effect in 2016 if passed during the coming legislative session.
While the bill would not affect corporate tax rates, some argue it would still deter businesses and their employees from coming to the state.
"Raising (the tax rate) would only hurt Utah in economic growth," said Billy Hesterman, vice president of the Utah Taxpayers Association. "We appreciate the effort to look for ways to improve education, but this probably isn't the answer we're going to support."
Senate President Wayne Niederhauser, R-Sandy, agreed with the need to find additional sources of education funds, but questioned the bill's use of the personal income tax to procure the funds.
"Income tax doesn't have to be the mechanism to increase funding to education because it's a tax on productivity," Niederhauser said. "Sales tax is a tax on consumption."
Jay Blain, director of policy and research at the Utah Education Association, said that while the association favors increased compensation for teachers, the bill should include a base salary increase and not just a performance-based incentive. Increasing base salaries would entice qualified teachers to come to Utah and stay here, he said.
"I think it would be fallacious to say that teachers are out there waiting to be motivated by monetary rewards to increase their proficiency. I think the vast majority of teachers are already out there being effective," Blain said.
Raising (the tax rate) would only hurt Utah in economic growth. We appreciate the effort to look for ways to improve education, but this probably isn't the answer we're going to support.
–Billy Hesterman, vice president, Utah Taxpayers Association
Utah's income tax was reduced from 7 percent to 5 percent in 2007 after several consecutive years of "fairly significant" revenue surpluses, Draxler said. But this was prior to the Great Recession, during which the state had to reduce its budget by about $2 billion. Despite efforts to "hold education harmless," dollars were cut from Utah schools, he said.
As the economy has recovered, education funding has been partially restored, but most of those funds have been absorbed by retirement and insurance costs, according to Draxler. He said increased funding brought by the bill would raise the standard of teacher profession and contribute to the use of technology in the classroom.
"To a large extent, we are frankly spinning our wheels when it comes to education funding in the state," he said. "This is the right time to make a bold move for the future of our children and grandchildren."
Despite division among lawmakers on the mechanics of the bill, many still agree on the need for discussion on expanding resources for education in Utah.
"It's time for us to say the emperor has no clothes," said Sen. Pat Jones, D-Holladay. "We really need to look at different options for investing in our future, in our children. I think it's worthy of discussion. I'm sure there will be other measures out there that we'll be hearing about."