The following is a white paper prepared by Davis for Local Education group member Josh Kostial to provide further insight into the challenges of education funding in Utah.
Why don't Utahns care about Education?
That's the unspoken (and sometimes spoken) question I hear every time someone says "Utah ranks last in per pupil spending". This statistic has always struck me as odd because I know Utahns do care about education. In fact, I find it hard to believe that any state could possibly care more about their children and those children's education. So what's the story behind this statistic? I have never seen an answer to this question, so I decided to do some research of my own to find out.
- Education is already the state's #1 priority
- Utah is last in per pupil spending...
- ...but 10th in percentage of government spending that goes to education. 65% of our entire state budget goes to education, including 100% of state income tax.
- We can’t just raise taxes. To even get to the national average in per pupil spending, taxes would need to go up $2.3 billion per year. The entire state budget is only $4.8 billion per year.
- Demographics are a big part of the reason, which is not something that can be "fixed"
- Utah has more students to pay for than any other state, per capita
- Utah also has the most residents under 18 (non-tax payers) of any state, per capita
- And finally, Utah has the fewest residents between the ages of 45 and 64 (highest taxpaying group), per capita
- The result is that far and way, Utah has the most students per taxpayer in the country (40% more than the average state and 10% more than any other state)…
- …and the most students per taxpayer in the critical 45-64 age bracket (70% more than the average state and 25% more than any other state)
- Excluding a major cultural shift in our state, there is essentially no way income taxes will ever be sufficient to raise per pupil funding
- The other part of the problem: most of the land in our state brings in no tax revenue because it's owned by the federal government
- 57.5% of Utah is owned by the federal government
- This isn't about the National Parks we are so well known for, those are only 4% of the state
- The federal Bureau of Land Management owns over 43% of the state
- This is a problem for all states west of the Dakotas
- This IS something that can be fixed
- The land was turned over to the federal government as part of the law that made Utah a state, but it was all to be sold off in a "timely" manner
- This was the same agreement every other state made
- The federal government fulfilled the agreement for all the states east of Colorado, where only 1-5% of the land is federally owned
- 5% of the sales of this land was to go directly into a trust for education in Utah
- Utah passed a law in 2012 demanding much of this BLM land be returned to Utah by the end of 2014
- If we really want more funding for education, as citizens we need to make sure our state government follows through on this promise and we must stop repeating the same misleading talking points
Education is already the state's #1 priority
The first thing I discovered is that Utah really is last in spending per pupil; the real question though is why? The easy answer would be we just don't put enough money into education, right? That's what we always hear following "last in per pupil spending", that we just need to make education a higher priority in Utah. The problem with that statement is that education is already our TOP priority. State funding for Public Education (K-12) is 50.4% of the entire state budget, and Higher Education is another 15.3%, for a total of 65.7% of state expenditures going to education. This includes 100% of the state income tax (Reference 1). Some may think that all the other states are even higher than this, but most are actually lower. According to the Census Bureau, Utah ranks 10th in the nation in the percentage of total government spending that goes towards education (Reference 2). That certainly doesn't sound like a state the holds little value for education. Others argue that we just need to raise taxes a little and our problems would be solved. This ignores the fact that our per pupil funding is so low compared to other states, that just to get to the national average, we would need to add $2.3 billion per year to education. The entire state budget is $4.8 billion. This would mean a 50% growth in taxes, an unheard of increase that would crush our top rated state economy. And that's just to get to average. Unfortunately the solution is not as easy as many try and make it sound.
Demographics are a big part of the reason, which is not something that can be "fixed"
So what then are the real factors causing us to do so poorly in spending per pupil? Answering this requires looking into each part of that per-pupil spending statistic, or dollars/student, in more detail. It turns out that Utah has the highest percentage of the population that is students of any state (Reference 3). One in five Utahns are enrolled in K-12 education, 25% higher than the national average and 4% higher than the next closest state. This not only affects the student part of that equation, but also has implications on the dollars part as well.
Dollars to a government usually mean one thing, taxes. Unfortunately Utah faces some significant disadvantages on this front as well. The first involves our state's age demographics. Utah has the highest percentage of citizens under age 18 (31% above the national average and 15% above any other state), a group that's obviously paying no real taxes. We also have the lowest percentage of citizens in the 45-64 age bracket (25% below the national average and 18% below any other state). This is actually the group with the highest income, meaning they would be paying the most in taxes as well (Reference 4).
This is not a good combination if the goal is more money for education. What it really means is we have 40% more students per adult in Utah than the average state and 10% more than any other state. We also have 70% more students per adult in that critical 45-64 age bracket than the average state and 25% more than any other state. Also keep in mind that these statistics are in comparison to all adults, but not all adults are working at a paying job. Many families choose to keep one parent at home and, unsurprisingly, Utah leads the nation in stay at home parents per many polls. This is not a statistic tracked by the Census Bureau so we cannot calculate exactly how much more unbalanced this makes Utah’s situation, but it undoubtedly makes the gap even larger. These are major difficulties we face that no other state has to deal with. However, outside of completely impractical ideas like child limits, these are not issues that the government can address. Excluding a major cultural shift in our state, there is essentially no way income taxes will ever be sufficient to raise per-pupil funding. However, there is another tax challenge Utah faces, and unlike these others issues, it's one we might actually be able to do something about.
The other part of the problem: most of the land in our state brings in no tax revenue
Like most states, education in Utah is funded about equally between the state and local governments, with the federal government chipping in a smaller amount. In Utah, local government tax revenue comes almost exclusively from property taxes; whereas state tax revenue comes from a variety of sources, including state income tax, sales tax, corporate taxes, etc. However, these types of local and state revenue require one very important element, that the land actually be in that government's jurisdiction. I think it would surprise many to learn that much of the land in the Western states is not owned by citizens, or even state or local governments, but is directly owned by the federal government. In Utah, 57.4% of all the land in the state is actually owned by the Federal government. Two states are even higher than this, with 69.1% in Alaska and 84.5% in Nevada (Reference 5). Contrast this with the states east of Colorado where the Federal government owns almost no land.
Most of us, when we think of the federal government owning land think of National Parks, of which there are many great ones in Utah. However, that's not what we're talking about here. In Utah, National Parks are only 4% of our state, a large number when you think about it, but nothing compared to 57%! So what is the rest of the land owned by the Federal government? Some of it is Forest Service land, some is owned by the Department of Defense, but the largest chunk of it is controlled by the federal Bureau of Land Management (BLM), making up over 43% of the entire state. Most BLM land has no stated use, instead leaving it to Washington DC bureaucrats to “administer” the land as they see fit. It also brings in little revenue for the state or local government, another large disadvantage for Utah in education funding.
This IS something that can be fixed
So why does the federal government own so much of Utah and other Western states? The answer to that question might finally show us a big part of the answer to Utah's education funding problem. The formal process of Utah becoming a state occurred with the passage of the Utah Enabling Act, a law that was essentially the contract between Utah and the federal government for Utah's statehood. A critical section of that law stated that the territory of Utah would turn over all lands still public at that time to the federal government, who would then sell them off in a "timely" (quoting the act itself) manner. Utah's Enabling Act, as well as this specific section, was essentially the same as that of every other state. The Federal Government held up their end of the bargain for the central and eastern states, which is why federal lands only make up 1-5% in most of these states. However, not only did the federal government fail to fulfill their obligation in this "timely" manner for the Western states, it failed to do so at all (See map above from Reference 6). This causes a huge disadvantage for Utah in education funding, as well as these others states; many of which also rank poorly in per pupil spending. And because we're talking about education funding, there's one last key provision of Utah's Enabling Act we have to discuss. Section 9 of the act states that 5% of the proceeds from the sale of these lands would go into a permanent trust to fund education, and education alone, in the state. So not only has the federal government violated their agreement and denied a source of revenue for our state and local governments by keeping the land, it has prevented funding of this education trust.
If we really want more funding for education, we need action, not false talking points
As a state, we do rank poorly when it comes to spending per pupil. But to just say we have to make education a higher priority and spend more money on it is ignoring reality. It is already the top priority for our state. If we want to see any real progress in this, we have to be honest about the disadvantages we face. We have more kids to pay for and less high income taxpayers to do it. As of 2010, the BLM owned 22 million acres of land in Utah. What could 5% of the sale of even a portion of that much land do for education in our state?! In 2012 the state legislature took a step towards making this happen with the Transfer of Public Lands Act (TPLA), otherwise known as HB148. This law demands the federal government meet the obligations they committed to at Utah statehood and turn over a large portion of that land to the state by December 31, 2014. Opponents of the law try to claim that Utah would immediately start abusing the land if this actually were to happen, calling to mind images of strip mining scenic Utah landmarks. Besides the fact that National Parks, landmarks, and similar are excluded in the law, who actually has more motivation to make sure this land is maintained in all of its beauty, a far-off bureaucrat in Washington DC that has never even been here or those of us that live in this state and truly appreciate it? This law is not about spoiling the treasures of our state, it's about having the ability to make decisions in Utah to help secure a better future for the children of Utah. However, it's almost certain the federal government will again ignore their duty in this, just as they've done for the last 100 years. This will mean our state government will likely need to take some bold steps if any progress is to be made; which in turn will almost certainly mean the citizens of our state will need to voice their support to ensure the governor and legislature follow through on it. This will be unfamiliar territory for most of us, but if we really want to increase education funding in our state and not just pay lip service to it, this is our only practical option. We can do the easy thing and just keep complaining about how awful things are, or we can step up and do something about it. The opportunity is here.
3-Table 19 of: http://www2.census.gov/govs/school/11f33pub.pdf
4-Table 3 of: http://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf
5-Table 1 of: http://www.fas.org/sgp/crs/misc/R42346.pdf