It is critical that Utah parents understand how the state funds education and that their voices are heard as the state sets education policy.
Education is the state’s largest budget expense, accounting for approximately 40 percent of the total budget. In 2012, Utah’s state budget is 11.9 billion dollars. Of that, 28.8 percent will be spent on K-12 public education and an additional 10.9 percent on higher education. Over 90 percent of funding for our K-12 public education is from state and local sources (only about 9 percent comes from the federal government).
Education Funding Sources
1. State Income Tax
Utah has a 5 percent individual and corporate income tax. Utah’s Constitution mandates that all of those funds be spent on K-12 and higher education. Approximately 55 percent of all education funding comes from state income taxes.
2. Property Tax
About 55 percent of property tax revenue will go directly to local public school districts. These property taxes fund about 30 percent of K-12 public education and are set by the state legislature and local school districts.
Utah is able to collect property taxes on only about ¼ of its total land. This explains the concern about Utah’s public lands being under the control of the federal government.
3. Federal Taxes
About 9 percent of the state’s total education budget comes from federal funding.
4. Additional Local Funds
Between 5 and 7 percent of education funding comes from local sources, including interest on district funding reserves.
5. State Alcohol Sales
Like the state income tax, 100 percent of profits from state alcohol sales are spent on K-12 public education. Depending on the year, this is approximately 1 percent of total education funding.
6. State Sales Tax
Depending on the year, a little less than 1 percent of total education funding comes from state sales taxes. Because all of the Utah state income tax is spent on education, the state must fund all of its other responsibilities with other taxes and fees.
7. School LAND Trust Fund
About 6 percent of Utah’s land is held in a trust. The interest on revenues from this land goes directly to public education funding. Again, depending on the year, this accounts for about 1 percent of total school funding.