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Senate substitutes education reform bill that adds income-tax adjustments and corporate-rate changes
Summary
Senators substituted a third version of SB154, combining education reform and tuition tax-credit provisions with a funding mechanism: modest two-year increases to individual income-tax brackets and incremental corporate-tax rate and minimum tax increases. The body circled the substitute for floor debate next week.
Senators on Feb. 20 substituted a third version of Senate Bill 154, expanding an education-reform package to include a funding mechanism that adjusts state income-tax brackets and corporate tax parameters.
Sponsor Senator Hatch told the Senate the third substitute adds an income-tax-rate adjustment to fund the education provisions; "It is an income tax increase, and adjustment in the rates," he said on the floor. He described a modest phased approach: the bottom individual-bracket rate moves from about 2.30 percent to roughly 2.33 percent in year one and 2.36 percent in year two; the top bracket was described rising from approximately 7.0 percent to about 7.1 percent, and then near 7.19 percent in the second year. The corporate franchise rate would rise from 5.0 percent to about 5.125 percent in year one and about 5.25 percent in year two; the corporate minimum-tax amount would also increase in a phased way.
Senators asked for more detail and comparative materials. Senator Stevenson requested a comparison showing the net impact on a typical family after accounting for federal child-tax-credit changes and the proposed state increases; Hatch agreed to provide a worksheet by Monday. Supporters said the substitute bundles education reforms, parental-choice (tuition tax credit) provisions, and the funding mechanism into a single package so members can review the full policy and fiscal trade-offs before debate on the second reading.
The Senate adopted the substitution and circled the third substitute to the top of the second-reading calendar so members can study the text over the weekend; Hatch said his intention was to give colleagues time to review the package before debate and votes next week.
Next steps: Third substitute SB154 is circled and will be debated in detail on the second-reading calendar, with fiscal materials promised by the sponsor before further action.
