State legislators should increase the tobacco tax to at least the national average and utilize the Rainy Day Fund to protect public and higher education from budget cuts. That was the message from the Salt Lake Chamber, Utah’s largest and longest-standing business association, at the State Capitol today.
“Funding for education is so critical to our long-term economic strength,” said Lane Beattie, president and CEO of the Salt Lake Chamber. “We have money put away to protect our interests in tough times and we have a way we can generate more revenue in a targeted manner. This plain just makes sense.”
Chamber leaders said they are pleased that legislators are protecting public education from further budget cuts, but they are deeply concerned that higher education faces cuts in the range of 20 percent. Higher education budget cuts in Utah dramatically exceed the cuts in other states for the last few years. The consequence will be falling behind in workforce training and research spinoff.
“Higher education is the chief economic engine in the state,” said Jake Boyer, president of The Boyer Company and chair of the Salt Lake Chamber Board of Governors.
“Our colleges and universities are developing our workforce; they are exploring new frontiers of knowledge and creating new industries. Businesses know that hard times are the time to invest in core strategies to position for future prosperity. We must maintain our investment in higher education during these difficult times.”
The Chamber calls for $50 million of the Rainy Day Fund to offset the lower than anticipated revenue projections released last week. This would still leave $203 million in the Rainy Day Fund. Mark Bouchard, the chair of the Chamber’s Education Task Force and senior managing director of CB Richard Ellis, says using the Rainy Day Fund for public and higher education is an investment in the state’s future workforce and prosperity.
“One of the things that makes Utah a well managed state is our Rainy Day Fund — money set aside to protect us in difficult times,” Bouchard said. “The rainy day is here, and we need to show the courage to tap into it for education. If we make dramatic cuts in higher education we are putting the core missions of our colleges and universities at risk. They are our economic engines. We can’t shut down the engine when we need it more than ever.
Increasing the tobacco tax from its current rate of 69 cents per pack of cigarettes to the national average of approximately $1.40 would generate an estimated $40 million for the state. That money offsets health costs to the state directly attributable to tobacco use and ultimately makes more money available to fund education.
“As a business community, we feel it would be irresponsible for us to simply pontificate on the importance of education without providing a plan to pay for it,” said Randy Shumway, president of Cicero Group. “Increasing the tobacco tax has overwhelming support from both the public and the business community because it has nothing but upside.”
Strengthening Utah’s education system is a top priority of the business community. Efforts this year have centered primarily around protecting funding but the overall vision is to increase investment and innovation. Utah must improve its high school and college graduation rates to compete in the global economy. Investing in human capital is the path to prosperity.
