December 17, 1990

Honorable Norman H. Bangerter
Governor of the State of Utah
210 State Capitol
Salt Lake City, Utah 84114

Re: Does the Use of Revenue Received from Taxes
on Income for the Support of the Public School
System Include Both the Public Education System
(Traditional K-12) and the Higher Education
System?
Opinion No. 90-039

Dear Governor Bangerter:

This opinion is in response to a recent request received from your office.

I. ISSUE

You have requested an opinion from this office as to whether the Utah Constitution allows revenue received from taxes on income to be used for purposes other than to fund traditional kindergarten through grade twelve ("K-12") public education. You further request, if our answer to that question is "yes," that we address the broader question of for what other purposes state income tax revenue may be used.

II. SHORT ANSWER

It is our opinion that revenue received from taxes on income may be used for both the public education system and higher education system as defined in the Constitution if authorized by the Legislature.

Honorable Norman H. Bangerter Opinion No. 90-39
December 17
Page 2

III. ANALYSIS

Relevant Constitutional Provisions

Prior to both the 1982 and 1986 constitutional amendments, four relevant sections of the Utah Constitution read as follows:

Utah Constitution, Article X, Section I (prior to 1986
amendments):

The Legislature shall provide for the establishment and maintenance of a uniform system of public schools, which shall be open to all children of the State, and be free from sectarian control. [Emphasis added.|

Utah Constitution, Article X, Section 2 (Prior to 1986 amendments):(1)

The public schools system shall include kindergarten schools; common schools, consisting of primary and grammar grades; high schools, an agricultural college; a university; and such other schools as the Legislature may establish. The common schools shall be free. The other departments of the system shall be supported as provided by law. [Emphasis added.|

The relevant part of Utah Constitution, Article X, Section 8 (prior
to the 1986 amendment):(2)

The general control and supervision of the Public School System shall be vested in a State Board of Education the members of which

(1) The language of Sections 1 and 2 had remained unchanged
from January 1, 1911, until the 1986 amendments became effective
July 1, 1987.

(2) Prior to an amendment effective November 7, 1950, this
Section read: "The general control and supervision of the Public
School System shall be vested in a State Board of Education,
consisting of the Superintendent of Public Instruction, and such
other persons as the Legislature may provide."

Honorable Norman H. Bangerter Opinion No. 90-39
December 17
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shall be elected as provided by law.
[Emphasis added.|

The relevant part of Utah Constitution, Article X, Section 3 (prior to 1982 amendment):(3)

All revenue received from taxes on income
or from taxes on intangible property shall be
allocated to the support of the public school
system as defined in Article X, Section 2 of
this Constitution. [Emphasis added.|

In 1986 (effective July 1, 1987) the Education Article
was amended. The relevant portions are as follows:

Utah Constitution, Article X, Section 1:

The Legislature shall provide for the
establishment and maintenance of the state's
education systems including: (a) a public
education system, which shall be open to all
children of the state; and (b) a higher
education system. Both systems shall be free
from sectarian control. [Emphasis added.|

Utah Constitution, Article X, Section 2:

The public education system shall include
all public elementary and secondary schools
and such other schools and programs as the
Legislature may designate. The higher
education system shall include all public
universities and colleges and such other
institutions and programs as the Legislature
may designate. Public elementary and
secondary schools shall be free, except the
Legislature may authorize the imposition of
fees in the secondary schools. [Emphasis
added.|

(3)By amendment in 1982, effective January 1, 1983, this
identical language was renumbered and readopted as Utah
Constitution, Article XIII, Section 12(3).

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Utah Constitution, Article X, Section 3:

The general control and supervision of the
public education system shall be vested in
the State Board of Education. The membership
of the board shall be established and elected
as provided by statute.

Utah Constitution, Article X, Section 4:

The general control and supervision of the
higher education shall be provided for by
statute. All rights, immunities, franchises,
and endowments originally established or
recognized by the constitution for any public
university or college are confirmed.

Prior to the Constitutional Amendments of 1986, the wording describing
the public school systems as used in the Education Article X and Revenue and Taxation Article XIII were consistent but not exactly the same. Article X, Section 2 used the wording "public schools system" (emphasis added) and Article XIII used the wording "public school system."

The 1986 amendments to Article X, Sections 1 and 2 did not utilize the same wording describing the "public school system". Article X, Section 1 now uses the language "state's education systems" and Article X, Section 2 now defines both a "public education system" and a "higher education system."

We must address the effect of the 1986 amendments to both Article X, Section 1 (from "system of public schools" to "state's education system") and Article X, Section 2 (from "public schools system" to "public education system" and "higher education system"). In addition we must address what effect these changes have on implementation of certain provisions of the
Taxation Article (Article XIII, Section 12(3)), which have not been amended and which refers to the "public school system as defined in Article X, Section 2." Before addressing these issues it is helpful to determine what the status was prior to the 1986 amendments.

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Would it have been constitutionally permissible to
use revenue received from taxes on income to support
"higher education" prior to the 1986 Amendments?

In addressing this question it is useful to look at the history of the
relevant constitutional provisions prior to the amendments. For nearly 60 years, revenues from state income taxes have been earmarked by the Constitution for the support of the "public school system". The first such constitutional restriction on the use of state income tax revenues was enacted
in 1930 as an amendment to Article XIII, Section 3. That amendment, effective January 1, 1931, provided as follows:

All revenues received from taxes on income or
from taxes on intangible property shall be
allocated as follows: 75 percent thereof to
the state district school fund and 25 per
cent thereof to the state general fund and
the state levies for such purposes shall be
reduced annually in proportion to the
revenues so allocated; provided that any
surplus above the revenue required for the
state district school fund as provided in
section 7 of this article shall be paid into
the state general fund.(4)

(4) Article XIII, Section 7, was also amended in 1930 to read,
in relevant part:

The rate of taxation on tangible property
shall not exceed on each dollar of valuation,
two and four-tenths mills for general State
purposes, and such additional levy as the
Legislature may provide for the State's share
of the support of a portion of the public
school system as defined in Article X,
Section 2 of this Constitution, such portion
consisting only of kindergarten schools,
common schools and high schools. [Emphasis
added.|

This language further illustrates that the Legislature, when it proposed this language, and presumably the public, when it passed this amendment, knew that the "public school system" encompassed something greater than kindergarten schools, common schools, and

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In the general election held on November 5, 1946, that section was amended to delete the provisions dividing revenue, and to provide that all revenue be allocated to support of the public school system. Since November 5, 1946, the relevant portion has read as follows:

All revenue received from taxes on income or from taxes on intangible property shall be allocated to the support of the public school system as defined in Article X, Section 2 of this Constitution.

The Legislature thereafter enacted legislation appropriating all revenues received from the state income tax to the support of the traditional K-12 education, which legislation has remained in effect without substantive change since 1947.

At various times since the 1946 amendment to Article XIII, Section 3, (and its subsequent renumbering in 1983 as Article XIII, Section 12(3)), attempts have been made in the Legislature to propose further amendments to this section authorizing the use of revenue from state income tax for purposes
other than traditional K-12 education. Those efforts have failed for various reasons.

Although historically, revenue received from taxes on income has never been used for higher education, the question is whether the Legislature, prior to the 1986 amendment and even back in 1947, could have appropriated the revenue from state income taxes for purposes other than to support traditional K-12 education. Again, the relevant provision, Article XIII, Section 3, after the 1946 amendment, restricted use of those revenues to the support of public school system as defined in Article X, Section 2 of the Utah Constitution, and Article X, Section 2, at that time read as follows:

high schools (traditional K-12). It would have been unnecessary
in Article XIII, Section 7, to limit the contributions to support
only a portion of the public school system, that portion being
the kindergarten schools, common schools, and high schools if the
"public school system" was limited to traditional K-12.

Article XIII, Section 7, was repealed by the 1986 amendments.

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The public schools system shall include kindergarten schools; common schools, consisting of primary and grammar grades; high schools, an agricultural college; a university; and such other schools as the Legislature may establish.

There is no Utah case law which addresses the issue of the use of revenue
received from taxes on income for higher education. In fact, the only Utah case which actually addresses the constitutional distinction between traditional public education and higher education is State Board of Education v. State Board of Higher Education, 505 P.2d 1193 (Utah 1973), which
dealt with the issue of management or control of the education system rather than funding or financing it. The case upheld the constitutionality of the 1969 Higher Education Act (1969 Act), which had divided the control of the Utah education system between the State Board of Education and the State Board of Higher Education.

Although the Court upheld the constitutionality of the 1969 Act the results were confusing. The three justices in the majority each wrote a separate opinion. The dissenting opinion pointed out that "four of the justices virtually have said the constitutional State Board of Education has power and authority superior to that of the State Board of Higher Education." Id. at 1199.(5)

The case did not provide a clear definition of either the authority of the State Board of Education, or the meaning of "the public schools system" as defined in Article X, Section 2 (prior to the 1986 amendments). Neither did it deal with the use of revenue received from taxes on income for either "public" or "higher" education.

With no specific case law to aid us we look at the clear meaning of the language, prior to the 1986 amendments. Article X, Section 2 included "an agricultural college; a university" as part of the "public schools system". Relying on the obvious language including these higher education
institutions as part of the public schools system it is our opinion that the Legislature was not constitutionally prohibited, and could have utilized revenue received from taxes on income, to

(5) The vagueness of the case was used by proponents as a reason for the passage of the 1986 amendments.

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support those named institutions of higher education prior to the 1986 amendments.

What was the purpose of the 1986 Amendnents?

In 1986 the Education Article was amended. The amendment changed the language of several sections, renumbered others and added additional sections. The sections relevant to this discussion were quoted earlier in this opinion. They include the amendments to Article X, Sections 1 and 2; the
renumbering of Article II, Section 8 to Article II, Section 3 and the establishment of Article X, Section 4. The new sections split the general control and supervision over the public education system and the higher education system. The amendments clarify the relationship between the State Board of Education and the State Board of Higher Education (now State Board of Regents) and resolve constitutional questions surrounding the Higher
Education Act of 1969.

It does not appear that there was any attempt to change the funding mechanism establish by the Constitution because Article XIII, Section 3, which was renumbered Article XIII, Section 12(3) in 1983, was not amended.

The tables below present, in summary form, the differences between Article X, Section 1 and Section 2 before and after July 1, 1987:

Prior to July 1. 1987 After July 1, 1987

Article X. Section 1
The Legislature shall provide The Legislature shall provide for ... for... a uniform system of the state's education system
public schools including:

a. a public education
system ... and

b. a higher education
system

Article X, Section 2

"Public Schools System" a. "Public Education
includes: System" includes:

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kindergarten schools all public elementary
common schools, consisting of schools
primary and grammar grades all public secondary
high schools schools
an agricultural college such other schools as
a university the Legislature may
such other schools as the designate
Legislature may establish such other programs
as the Legislature
may designate.

b. "Higher Education
System" includes:

all public universities
all public colleges
such other
institutions as the Legislature may
designate such other programs
as the Legislature may designate

From the foregoing it appears clear that the 1986 Constitutional Amendments to Article X were intended to change the "uniform system of public schools" to the "state's education systems" and to split th state education system into the "public education system" and the "higher education system". The amendments gave constitutional status to both the State Board of
Education and the State Board of Higher Education (now State Board of Regents), and there were no amendments in 1986 which dealt with methods of funding education. The 1986 amendments to Article X created a readjusted structure to govern Utah's school system; the State Board of Education for the public school system and the State Board of Higher Education (Regents) for the higher education system.

We now answer the question of the effect of the constitutional amendment creating two governing authorities for the state's education systems on the revenue and taxation provision, Article XIII, Section 12(3). Does the Article apply to both newly identified systems or only to the public education
system? Article XIII, Section 12(3) was not amended in 1986; and though it might be argued failure to do so was merely an

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oversight, it is probable that the failure to amend was occasioned by the fact that the amendments were intended merely to clarify the two governing authorities and not intended to affect funding of the system.

Since the constitutional provision governing use of revenue received from taxes on income for schools, Article XIII, Section 12(3), was not changed at the time of the amendment of Article X, or thereafter, thus retaining the term "public school system" and since Article X no longer uses the term "public schools system" and divides responsibility for control of the
state's education system in a different way from how it was divided before the amendment, we can no longer simply rely on the sameness of the labels used in the two sections. In this circumstance we think the most reasonable conclusion is that revenue received from taxes on income may be allocated to the same entities now as those to which they could have been allocated before the 1986 amendments to Article X even though the names of the entities may have changed. That is, these revenues may be allocated to "kindergarten schools; common schools: consisting of primary and grammar grades; high schools, an agricultural college; a university; and such other schools as the
Legislature may establish."

A key to resolving this question is the meaning of "such other schools as the Legislature may establish." Is "schools" limited to kindergarten schools, common schools consisting of primary and grammar grades, and high schools or does it extend to other educational institutions. Since in Article X, Section 2 the "public schools system" is stated to include "an agricultural college" and "a university" it can be seen that "schools" as used in this section is not limited to the traditional K-12 type of entities. Hence, it is our opinion that the entities to which Article XIII, Section 12(3) funding properly extends is likewise not limited to traditional K-12
types of entities. "Schools" here means the broad spectrum of educational entities which the Legislature may establish.

CONCLUSION

It is our opinion, therefore, that the Constitution does not prohibit the Legislature from allocating revenue received from taxes on income to public educational funding purposes other than the funding of traditional K-12 in the "public education system," as that term is used in the current
language of Article X, Section 2. The entire "state education system" including the "public education system" (which includes

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"such other schools and programs as the Legislature may designate") and the "higher education system" (which includes "such other institutions and programs as the Legislature may designate") may utilize revenue received from taxes on income if the Legislature enacts appropriate legislation.

At present the Legislature has provided by statute that "The Uniform School fund established by Article X, 5, of the Utah Constitution consists of money received in the state treasury from the following sources: * * * (7) all other constitutional or legislative allocations to the fund, including
revenues received under Article XIII, Sec. 3. of the Utah Constitution from taxes on income or intangible property." [Emphasis added.| Utah Code Ann. 53A-16-101 (1989).

The Legislature need only amend Utah Code Ann. 53A-16-101 (1989) to provide that not all of the revenues from state income taxes are allocated to the Uniform School Fund, and the revenues not so allocated would be available to support other schools, institutions or programs in the "public education
system" or the "higher education system" under Article X, Section 2.

Please feel free to contact the undersigned if you have further questions.

Very truly yours,

BRYCE H. PETTEY
Assistant Attorney General
Chief, Tax and Business
Regulation Division

BRENT H. CAMERON
Assistant Attorney General
Chief, Education Division

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