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Legislators threw double punches Monday at the Our Schools Now ballot initiative, which seeks to ask voters to raise income taxes by $750 million a year for schools.
First, House Speaker Greg Hughes said the House has no appetite to raise taxes this year for education, and criticized the proposal as doing more to hurt than help schools.
Second, the House will consider a bill mandating that the initiative spell out the percentage increase in taxes proposed. .
Supporters of that initiative have described it as an increase of 7/8 of 1 percent on the state income tax rate, raising it from 5 percent to 5.875 percent.
That is true, and may sound small. But Rep. Dan McCay, R-Riverton, notes that the actual tax increase everyone would face is 17.5 percent.
His HB255 would require language describing a tax change on the ballot to use a percentage of the taxes charged, not the rate.
"It prevents what I believe is gamesmanship by showing either a decimal place or fraction that may not tell the whole story about what the tax increase is," he told the House Revenue and Taxation Committee.
That committee unanimously passed the bill, and sent it to the full House. No one spoke against it at the Monday hearing.
"We see this as transparency for the taxpayer," said Billy Hesterman, vice president of the Utah Taxpayers Association. "It is an appropriate way to give the taxpayer a full understanding of what is being presented to them."
"More information is better," said House Minority Leader Brian King, D-Salt Lake City. "It will give us a better likelihood of understanding the proposal."
Meanwhile, Hughes told the Tribune, "I don't see a strong appetite in the House for a tax increase" of any sort, including for education.
"We don't think raising the income tax will drive more economic development or economic expansion to our state," he said. "Most states that are trying to find stronger economic activity are trying to lower their state income tax. We'd be going the other way."
Gov. Gary Herbert has raised similar concerns several times. Hughes said the House will look at reforms that could increase revenues, such as collecting more owed-but-uncollected tax on internet sales, or removing some current tax credits and deductions.
"We're going to look at that," he said. "There's an outside chance that if we could land on some smart reforms, we may pursue it even this year."
But he said House leaders would commit to studying seriously in interim sessions through the year how better to fund schools and reform the tax system.
"We know that minimally, we'll commit it to interim to a real study of our tax base and how we collect it. Is there a smarter way to strengthen it?" he said. "We might night need to look at our tax structure ... so that there isn't ideas we wouldn't like that are coming forward like this."
Leaders of the Our Schools Now effort point to Utah's last-in-the-nation per-pupil funding and warn of the long-term consequences of shortchanging education.
"Right now, Utah students are learning with fewer resources than ever. Because of past budget decisions, schools are operating with $1.2 billion less, this year alone," the group says on its website, referring to an income tax rate cut in the early 2000s and an earlier constitutional amendment that allowed the income tax to go to colleges and universities as well as kindergarten-12th grade. "This results in burdensome classroom sizes, stagnant student learning and most importantly, reduced opportunities for our children. Our Schools Now makes an investment in Utah kids today in order provide an exceptional education our students need for the future."
McCay, House chairman of Public Education Appropriations Subcommittee, also said he opposes the Our Schools Now initiative. He worries that it will fail, and "a loss at the ballot over taxes would be bad for our education system for a long time," making it more difficult to fund it in year-to-year budget battles, he said.
McCay said Monday, "I think it's dangerous to raise taxes anytime you have an economy that is effectively moving. I think it's even more difficult, though, to not tell the whole story behind the economic picture of what you are attempting to do."
A recent Salt Lake Tribune-Hinckley Institute of Politics poll found Utahns support the proposed tax increase 55 percent to 41 percent.
A recently released poll by the Libertas Institute and the Utah chapter of Americans for Prosperity, suggests a requirement to provide extra tax information could stop defeat the Our Schools Now initiative.
The poll showed 50 percent of participants in support of raising the income tax rate by seven-eighths of 1 percent. But when told the change would cost the average Utah family of four $900 each year, 69 percent of participants said they were less likely to back the initiative.