Income Tax Increase Won’t Improve Education Outcomes

The following op-ed, written by our president Connor Boyack, was published this past weekend in the Salt Lake Tribune.

A group of business owners and former politicians have announced a plan to pursue a ballot initiative that—were it to pass—would increase each Utahn’s income tax rate. The proposal, pitched as a way to help children, is saturated in misleading messaging and is ultimately unnecessary.

“Our Schools Now” is a new label for a group of politically connected insiders, led by Zions Bank CEO Scott Anderson, a behind-the-scenes influencer in Utah politics. They recently announced their initiative proposal, telling the public that they are seeking only a “7/8 of 1 percent increase” to the personal income tax.

This is misleading because it lacks context—it makes it seem like a numerically insignificant amount. In reality, that seemingly tiny amount constitutes a 17.5% increase on each Utahn’s income tax burden.

Let’s make the numbers even more real. Utah’s median household income is just below $60,000. This produces a state income tax burden of around $2,700. If the proposed ballot measure passes, that would increase by $472—just for a single year. That’s no small sum.

But many seem willing to pay it. According to a recent Dan Jones poll, 30% of Utahns apparently feel that they pay too little in income taxes (and in Utah, all income taxes are allocated to government schools). Of course, nothing is stopping these individuals from voluntarily paying more of their own money to the government should they truly feel this way. And yet, shockingly, that’s not happening.

But why is the proposal unnecessary? In the words of its sponsors, the tax increase is being proposed to “improve student learning” and produce “greater outcomes.” But it’s false to argue that more money equates to better results; there are plenty of states that have more education funding than Utah, yet poorer academic results.

For example, the District of Columbia spends more than triple the amount per pupil than the state of Utah, yet you probably couldn’t pay parents in Utah to send their kids to school in D.C. Nobody would attempt to argue that D.C. students perform three times better—or even at the same level—as students from the beehive state. Based on ACT scores, the highly-funded D.C. students rank consistently lower than their Utah counterparts.

In fact, a study on state education spending by the Cato Institute undermines the entire premise behind the “Our Schools Now” tax increase proposal. Studying inflation-adjusted spending per pupil in the 50 states, and comparing it against academic achievement for the past 40 years, the report demonstrates that there is no correlation between what states spend on education and their measured educational outcomes.

As for Utah, the report notes that per-pupil spending has increased since 1972 by 60 percent on top of inflation while, over that same period, SAT scores have actually declined by as much as seven percent.

Put simply, more money does not equate to “improved student learning” or “greater outcomes.”

The tax increase is also unnecessary because there is significant waste and bloat in the government school system. For example, when the Utah Legislature increased public education spending by 2% in 2013, most of the money was diverted to pay for pensions and health care obligations. In the Salt Lake and Alpine school districts, not a single penny went into the classroom to benefit children.

This raises the question as to whether tax increases are truly intended to help Utah’s children, or if these children are a political prop by which a top-heavy education industrial complex can continue to sustain an inefficient layer of administrative overhead without feeling the financial pressure to innovate, become more efficient, and eliminate waste.

Utahns are taxed enough already. Just last year, the governor signed into law the biggest tax increase in two decades—taking an additional $25 million from Utahns through the gas tax for transportation projects, and $76 million through the property tax for education. Through passage of Proposition 1 last year, many counties have also increased their sales tax for transportation as well.

All of this in supposedly “conservative” Utah.

The state’s school system is indeed in need of improvement and innovation, but increasing funding to an inefficient institution will not magically solve the problem of academic achievement being lower than where parents and policy makers prefer. With the right leadership, however, the current financial pressure provides an incentive to innovate.

Put simply, those who truly care about education outcomes should oppose this significant tax hike.