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Utah Business

Lower income taxes in Utah might seem great, but it all comes at a risk: the deduction would result in reduced education funds, ultimately affecting the workforce.

Lower income taxes means reduced education funding—which affects tech growth

There are currently about 6,000 open development jobs unfilled in Utah’s tech industry. That’s not awesome for the 6,500+ tech companies that call the Beehive State home. 

One of the best ways to fill those jobs and continue to attract startups and out-of-state companies? A robust STEM education that prepares Utah’s students to emerge as a qualified and skilled labor force. But for some in Utah’s tech industry, government support for the kind of instruction needed to support that education-to-tech flow can feel like one step forward and two steps back. 

What’s up on Capitol Hill?

During Utah’s 2022 legislative session, Utah Tech Leads, an industry association and political action committee representing Utah’s tech sector, raised concerns over HB 105, HB 197, and SB 62—all bills designed to cut income taxes. 

While lower taxes might sound universally beneficial on the surface, Utah income tax directly funds Utah education. Any reduction in income tax, in turn, diminishes the state’s ability to educate our students—which limits the ability to prepare our state’s young minds for higher-paying jobs in the tech industry. 

“Working with our membership, we have found little to no support for additional cuts to the state’s income tax rate,” says Utah Tech Leads CEO Sunny Washington. “Our industry is deeply concerned for the state’s future ecosystem and is grateful for the proactive planning that our leaders have enacted already in so many areas. Utah’s tech community believes it is time to focus on intentional growth. We can no longer look the other way or follow political precepts to the detriment of our community.” 

Utah’s population is expected to continue its upward trend, with nearly 30 percent of those people under the age of 18. “It is time for innovative ideas in education and other services to come forward that will support our growing tech sector,” Washington says. “We cannot do this with a growing population and shrinking budget projections.”

Taking a bite out of future education

While most of the proposed income tax-related bills didn’t make it to the Governor’s desk, Sen. Daniel McCay’s SB 59 did. “This bill decreased income tax by .1 percent, which comes down to a loss of around $200 million of revenue for the state,” says Elizabeth Converse, executive director at Utah Tech Leads. “Realistically, it’s future money. We don’t know what our income is going to be. The more successful our businesses are, the more taxes we bring in. At this point, it doesn’t impact education in its current needs but could impact education in its future needs.”

While Utah doesn’t have enough students graduating with STEM certifications or degrees, the state does have an incredibly high rate of retainment. 88 percent of Utah college graduates (who graduate in these areas of study that we need) stay in Utah, Converse says. “They immediately get jobs right out of the gate, and they stay here. That’s a huge number, but it’s just not enough,” she says. 

Some good news

It’s not all disappointing news on the STEM education front. A few years ago, the Utah legislature passed the 2019 Utah Computer Science Grant Act, which created a Computer Science Education Master Plan that provides information on how local education agencies can implement computer science education opportunities for students in elementary, middle, and high school.

The act also created the Computer Science for Utah Grant, which includes professional development and upskilling opportunities for teachers. The grant’s goal was to make sure every school in Utah taught computer science by 2022—however, funding was curtailed and progress was waylaid during the pandemic. Proponents are currently working to restore full funding.

There are other STEM-oriented programs in the state, most notably the Engineering Initiative, which began under Gov. Michael Leavitt in 2001. “The Engineering Initiative has been running for more than 20 years now. It has funded the growth of engineering and computer science education in all of the Utah System of Higher Education schools,” says Richard Brown, the dean of the College of Engineering at the University of Utah. 

“At the University of Utah, we were graduating 366 students a year from the College of Engineering in the year 2000. That grew to 1,145 graduates last year, and this year we saw a big boost over that,” Brown says. “Enrollment in computer science has grown from 692 in 2005 to 2,943 last year. The University of Utah produces 49 percent of all the BS, MS, and Ph.D. graduates in computer science and engineering in the state, but we couldn’t have grown like this without that support from the legislature. It’s been spectacular.”

Boding well for a continued increase in computer engineering graduates in the state, the University of Utah has just begun plans for a new Interdisciplinary Computing Building—which, according to a fact sheet, will be a “six-story, 209,000 square-foot structure allowing the university to expand its offerings in data science, cybersecurity, fintech, machine learning and AI, human-centered computing, and bioinformatics.”

Thoughts on the future

So beyond grants and initiatives, what else can Utah be doing to support STEM education and the future of our tech workforce? 

“Computer science is a required subject for Utah students, but that requirement is limited to one or two courses. I am not advocating for more classes for all students; I am advocating for earlier partnerships to help students who have an interest in this field understand what classes will help them be prepared for a career in STEM,” says Kami Taylor, a computer science administrator for Jordan School District. 

Speaking as an educator (not a district spokesperson), Taylor continues, “We are all aware of the need for an educated workforce. Everyone agrees with the need to help our students be prepared for the jobs of the future. However, I see a need for education and industry to start talking earlier and more often about how we engage students in the skills that industry has identified as essential to employability.”

From his vantage point as director of product manager at Jobber, Blake McClary says, “Obviously, greater access to STEM programs in schools is huge. But one thing we can do for older kids is career exploration in tech. Field trips to tech companies, guest speakers talking about their jobs, information on expected wages, and benefits of a tech career.” 

McClary believes that if kids see the benefit of what a tech career offers, they’ll be more willing to invest the time in learning to code. “Kids need to see that working in tech is cool,” he says. “I think that will draw more interest in STEM at the high school and college levels. STEM education in our K-12 schools is probably the biggest lever we have for reducing income equality in our state.”