A Cut Below 

One of my most perplexing memories as a child was driving shotgun with my father as we crossed state lines from Utah into Wyoming.

“Feel that?” my father asked as we passed the “Welcome to Wyoming” sign. “The state income tax just dropped to zero!

The twinkle in his eyes was palpable, but I just shrugged as I looked out into Wyoming’s vast expanse of rolling prairies. As someone 10 years away from paying taxes myself, the full consequence of my father’s comment was lost on me. But even if the fine folks of Wyoming paid no state income tax, the place looked mighty empty and boring to me. Years later, about the time I learned to pay my taxes, I also learned that people go to Wyoming for several other reasons as well, such as full-strength beer, full-strength pornographic videos, and fireworks with some real muscle.

All of which goes to demonstrate a now-famous phrase among economists, first coined by Steven E. Landsburg in his book The Armchair Economist: “Most of economics can be summarized in four words: ‘People respond to incentives,’” he wrote. “The rest is commentary.”

So, too, is this editorial regarding the Utah Legislature’s latest budget, a seismic realignment of our fiscal priorities that, if passed, will give $490 million to roads, $211 to $220 million in tax cuts, and a record $460 million to public schools. My words are just commentary, and incentives do matter. But not all incentives can be chalked up to money, and as a pesky, ungrateful liberal, I’m probably bound to complain no matter what. So, here it goes.

Roads, it seems, never have been neglected for too long in Utah, but it was the last two numbers that had everyone’s jaws dropped. Thanks to Utah’s splendiferous economy and unemployment rate with hardly any breathing room, Utah’s awash in surplus cash. It’s estimated that the proposed tax cuts will result in an average savings of $97 to $200 per individual or family. That savings, matched with other tax cuts and a new 5 percent tax rate with limited credits, prompted both the governor’s spokesman Mike Mower and Senate Majority Leader Curtis Bramble to gush that Utah would soon be competitive enough tax-wise to compete with surrounding states when it comes to attracting outside companies for relocation to Utah.

Perhaps the real news was that the $460 million allotted to public education exceeded even Gov. Jon Huntsman Jr.’s $315 million request, although it didn’t exceed the Utah State Board of Education’s $494.6 million request. They probably know well enough to aim high anyway, however, as they’re used to getting a fraction of their request.

This big, big news amounts to an increase in the state’s per pupil spending by several percentage points. One estimate puts it at an increase of 8 percent. In addition, state teachers get $68.7 million in raises, $33 million for one-time bonuses and $85 million in class-size reduction money.

Why, then, complain? For starters, $50 million of that $460 million goes toward new classroom technology. No one argues that technology won’t be important as students leave the classroom and enter the workforce. At the same time, it goes without saying that it’s teachers who give the lessons, not computers. At the same time, everyone knows that proficiency in math and science matters most when it comes to future economic growth and competition among nations. That’s why the State Board of Education requested $30 million for scarce science and math teachers, along with those who teach special education. It’s maddening that $50 million in new technology got funded, while this crucial need was seemingly kicked to the side.

More maddening, though, is that the Legislature seems hell-bent on doling out tax cuts that will amount to little more than $200 per family when they could easily resist that temptation and save that money for future education costs instead. By some estimates, Utah will have more than 160,000 additional students to teach in the coming decade, and no one can be certain even this year’s generous allotment toward education will kick Utah’s dismal class-size statistics out of the national ghetto.

It’s understood that the Legislature feels it must do something with this unparalleled surplus of funds. No one will argue too long that a lot of this money should be spent on education, while some of it should be returned to Utah taxpayers, who’ve long been burdened with one of the American West’s highest tax rates.

Problem is, the phenomenal economic times that helped produce this surplus will almost certainly and eventually pass through another economic cycle of contracting growth, bringing us back to a time when we’ll need all the education money we can get given our state’s exploding student population. It’s also worth mentioning that as much as $200 in annual tax savings will do little to appease another growing Utah problem, a growing dearth of affordable housing. In addition, most economists will tell you the Legislature’s proposed 5 percent tax rate does more to help higher-earning families than those at the lower end of the income bracket.

So incentives matter. But if they really mattered, we would have all packed up for Wyoming a long time ago, and an extra $200 in our pockets may make us feel a little better about our Legislature, but our state’s education system seems to have a long ways to go before it’s out of the thicket once and for all.