Sen. Karen Morgan, D-Cottonwood Heights, said she was told that Republican House leaders had delayed the bill for weeks and wanted it killed. The funding issue was "an excuse," she said.
"Games are being played with the bill," she said.
Morgan said the current class size in the early grades is 27 per classroom, although many have more than 30 pupils.
"It's very difficult for a child to receive the individual attention they need in such circumstances," she said. "With that many children, it often becomes a situation of crowd control versus learning."
Under the bill, schools that exceeded the new caps could also hire teachers' aides to get back under the threshold.
A 2007 legislative audit showed that $460 million meant to make class sizes smaller in Utah over seven years hadn't led to any change, though some have said class sizes would have been even larger if not for that money.
Last year, legislators gave $103 million to schools for class-size reduction. This year the figure is expected to grow by about $3.2 million.
Morgan's bill would direct that money to the early grades. Schools that didn't comply with the caps could have lost the class-size reduction funds.
Without Morgan's bill, the class-size reduction money will still be available, but without the accountability and direction toward early education.
Morgan's bill had passed the Senate 19-9, but was tabled by the House Revenue and Taxation Committee on a vote of 8-4. Opponents argued that reducing class sizes would cost districts money, hiring teachers and building new classrooms. That could cost up to $16 million.
Richard Reese, representing the Utah School Boards Association, said schools would need additional funding to shrink class sizes further. He said it would cost districts more than $33 million to hire the teachers needed to shrink kindergarten classes in the first year and additional money for each grade each year after.
"There are limited resources. … If you squeeze the balloon and make one end smaller, you're going to increase pressure on the other side," he said. If money is spent reducing K-3 class sizes "class sizes in other grades will necessarily increase."
Rep. John Dougall, R-Highland, said that while he lived in California, he saw the damage done by an aggressive push to reduce class sizes.
"Rather than focus on the academics for the students, they focused myopically on class size. What that meant is any warm body was sufficient to meet that mandate," Dougall said. "I will continue to have problems when we focus on the wrong issue. We need to focus on academics. We shouldn't focus on class size."
Lisa Schencker contributed to this story.