Stephen Kroes, President of the Utah Foundation at a panelist at our upcoming Utah Breakfast Club Event on March 12, 2015, "Making Education a Priority: Tackling the State's Workforce Challenges," recently wrote the following blog post on the impact of tax cuts on public schooling.

Public schools shoulder the burden of tax cuts
Written by: Stephen Hershey Kroes
February 19, 2015

For many years, Utah Foundation has written about the decline in Utah’s investment in K-12 education. In the 1990s, it was common to hear about Utah’s “education paradox” – a term Utah Foundation coined to describe how a very high funding effort could yield a small amount per pupil. In 1995, for example, the proportion of income that Utahns paid for public schools ranked seventh highest in the nation, yet per-pupil funding was last in the nation. Of course, the reason for the paradox is that Utahns have big families. Even a high effort – a high tax burden for schools – would yield a low amount per student.

The paradox disappeared over time, as property tax cuts first began to chip away at the funding effort. Then the earmark of income tax was weakened, providing more flexibility in the state budget. Utah Foundation has covered this topic in briefs and reports several times. But a recent Utah Foundation report highlights a connection that was not previously apparent.

Utah’s tax burden is at its lowest level in 20 years, about $13 lower per $1,000 of personal income than at its peak. This is very close to the amount of reduction in public school revenues, which have fallen about $10 per $1,000 of personal income since the mid-1990s. Now, the timing is different – the slide in education funding effort has occurred over two decades, while the reduced tax burden is only recent. Taxes were reduced significantly in 2007, mostly through income and sales tax reductions. But the net effect is that, in the end, almost all of the burden of lowering taxes has come out of public education budgets.