News Release

August 14, 2024 (Salt Lake City) – On the November 2024 ballot, voters will decide whether to amend the Utah Constitution to allow income tax revenue to be used for any public function, contingent on maintaining certain school funding provisions. A new policy brief from the Kem C. Gardner Policy Institute summarizes current and proposed uses of the income tax and impacts on K-12 funding.

“Currently, the Utah Constitution limits the use of income taxes for public education, higher education, other services for children, and services for people with disabilities,” said Phil Dean.  “In November, voters will decide whether to amend the Utah Constitution to allow the use of income tax revenue for any public function, contingent on maintaining a school funding framework. “

Key findings from the policy brief include the following:

Framework for Funding Public Education – If the amendment passes, this funding framework includes provisions to maintain a budget stabilization account and use a portion of income tax revenue growth for:

• Changes in K-12 enrollment growth
• An inflationary adjustment

Strong Income Tax Growth – In recent decades, income tax (with its limited budget flexibility) has grown much faster than other state taxes. State sales taxes grew more slowly, and real (inflation-adjusted) per capita gas taxes declined.

Companion Bills – Contingent on the constitutional amendment passing, two companion bills will take effect:

• H.B. 394 (2023) Hold Harmless for Public Education Enrollment, which would increase certain per-pupil funding for 5-10 years if enrollment declines (as projected for the next decade).
• H.B. 54 (2023) Tax Revisions (Repealing the state sales tax on food) – Utahns currently pay a 3.0% sales tax on food, including a 1.75% state rate and a 1.25% local rate. This bill would repeal the state’s 1.75% portion of the sales tax on food.

“Utah’s current constitution earmarks income tax revenue for public K-12 education, higher education, and children and people with disabilities,” said Andrea Brandley, senior education analyst at the Gardner Institute. “The proposed amendment adds maintenance of a statutory public education funding framework before allowing the use of income tax revenue for other public purposes.”

The full policy brief is now available online.

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