Senate passes substitute House Bill 293 to rebalance school funding, cut income tax and index basic levy

The Utah Senate on floor action approved fifth substitute House Bill 293, a contested tax-rebalancing and school-funding package that sponsors said protects education funding while delivering a modest income tax cut.

Senator Fillmore, the bill sponsor, told colleagues the measure contains two core elements: a five-year sunset review for the bill’s tax provisions and a rebalancing that preserves local basic-levy revenue while reducing the top‑line state income tax rate from 5.00% to 4.95. “This bill addresses each of those problems,” Fillmore said in his introduction, adding it funds education equity “to the tune of $36,000,000 a year and $125,000,000 over 5 years.”

Fillmore argued the package prevents a ballot initiative that would have imposed what he described as a $700,000,000 income‑and‑sales tax increase and said, “When this bill passes this body and is signed by the governor, our schools now will drop their initiative petition, and our voters will no longer face the threat of a $700,000,000 tax increase.”

Senators pressed the sponsor on details and trade‑offs. Opponents said parts of the bill — notably a provision that phases in single‑sales‑factor corporate taxation — shift benefits to some businesses. Senator Dabakis urged letting voters decide the larger package in November: “Let’s have that battle. Let’s have it in November,” he said. Other senators questioned how much the basic levy indexing would add to individual property bills and how the indexing would be reviewed in the future.

Supporters said the bill protects districts that need more equalization while offering immediate tax relief for families. Fillmore and other backers framed the trade as protecting a stable property‑tax floor for schools for five years in exchange for a permanent (albeit small) reduction in the income tax rate that they said will deliver immediate relief to households.

On final action the Senate recorded 25 yea votes, 3 nay votes and 1 absent; the measure passed and was transmitted to the House for its further consideration and the governor’s signature if enacted.

What’s next: The bill now returns to the House for its concurrence and signature steps; supporters flagged a five‑year review requirement that will bring the changes back to the Legislature for evaluation. The debate highlighted competing priorities—immediate tax relief, longer‑term equitable school funding, and the distributional effects of corporate tax changes.

Sources: Floor debate and roll‑call motions on the Senate floor; direct remarks by Senator Fillmore, Senator Dabakis and other floor speakers.