The 2020 Utah Legislature will finish up on March 12. With two weeks left in the session, lawmakers have yet to hammer out this year’s education funding bill.
Business Administrator Todd Hauber says while recent updates for the state general fund show a shortfall of about $12 million, the general education fund was up by about $77 million, compared to what had been forecasted in December. Income tax in Utah funds education, and Hauber is watching legislation that could allow for different types of income tax reductions.
“So, that’s aggravated and created some anxiety with this imbalance within the state budget overall and has really thrown into question exactly how the legislature will balance its budget this year. I've been in different meetings the last two weeks trying to figure out what that might look like, and at this point, there isn't an answer.”
Hauber says Utah schools could see a 5% equivalent increase in the weighted pupil unit, which is the mechanism used to distribute education funds throughout the state.
“The appropriations committee is recommending a 4% increase in the value of the WPU as well as setting aside about the equivalent of 1% WPU for either the Teacher Student Success Act fund or into further equalization. They left it as a choice for Executive Appropriations to determine where that money would go."
Rep. Tim Quinn, a Republican from Heber, is sponsoring House Bill 260, which would give additional income tax exemptions for dependents. Hauber says it makes sense because the state has additional income tax revenues coming in. He’s also watching Senate Bill 191, which allows changes to adjusted gross income.
“That you could reduce your distributions from a qualified retirement plan. Early in December or November last year there were discussions about not taxing Social Security so I think this is kind of the vehicle by which that concept could move forward.”
As of this report, the dependent tax amendment bill, HB 260, is in the House Rules Committee and has not had a floor vote. The income tax revisions bill, SB 191, is waiting to be heard by the Senate Revenue and Taxation Committee.
However, Legislative leaders have said no amendments to the state’s tax code will go forward during the 2020 general session after the legislature’s repeal of the tax reform law that passed in a special session last December.
