By Jesse Harris
By Jesse Harris

Another election, another round of statewide constitutional amendment questions! There’re three Constitutional Amendments in Utah for 2016 on your ballot. Here’s a quick TL;DR of each of them so you can figure out how you want to vote.

Constitutional Amendment A

This is a very minor adjustment to the oath of office to clarify that “this State” means Utah. It should be fairly obvious in context (I mean, what other state constitution are you going to be talking about during an oath of office in Utah?), but it never hurts to be completely clear.

Constitutional Amendment B

Any amendment dealing with education funding is certainly to draw some increased scrutiny. In this case, the amendment makes three changes as part of a package.

The first change is to replace the term “interest and dividends” with “earnings”. The example of “earnings” that isn’t “interest and dividends” would be gains on stocks that appreciate in value. If your first thought is “what if we spend those gains and the value drops”, that’s where the second change comes in. It would limit the amount that can be spent in any given year to 4% of the total fund. In a good year (greater than 4% growth), the fund principle will grow. In a bad year, it will only be able to spend those earnings, if any. The final change is a more technical one to swap out the term “safely” for “prudently”, a term more in line with fiscal lingo.

digital_3214The argument in favor is that this has the potential to increase the amount of money flowing to education. The argument against is that it makes the cash flow much more unstable depending on how the fund may be performing.

Constitutional Amendment C

I feel like I need a couple of tax lawyers to understand this one fully. Obviously, government entities that own property aren’t going to pay tax on that property. This change also makes it so that any leased property is exempt from property taxes for the owner making that lease. The theory is that government entities end up effectively paying property tax that gets rolled into their rent. The counter-argument is that the rabbit hole can go down pretty far when you start saying that anything the government might touch or use creates a ripple of tax exemption. My personal take is that this is one of those things that can cut either way and will probably be tinkered with a lot if it passes.

  • Natalie

    Amendment B only applies to the distribution from the permanent State School fund – the money from the school trust lands. So it’s only the distribution to the school community councils that will be affected. And because the new formula considers a 12 quarter rolling average, the distribution is actually more stable and less volatile. I was in a meeting yesterday with the state treasurer, who is the chief investment officer for the state. He said that the only people that will oppose it are those that don’t understand it. Let me know if you have any questions.

    • H Hatfield

      I don’t understand it. Tried emailing my state senator, but that proved fruitless. The part I don’t understand is how realized losses wouldn’t offset interest and dividends earned, thus reducing the disbursable amount. Is that a wrong understanding of “earnings”? It seems to me that what is intended is that all “interest and dividends” plus any positive earnings may be disbursed, but that’s not how I understand it to be worded.

      Thanks for any understanding you can send my way!