Utah Gov. Spencer Cox issued his first veto out of the 2025 legislative session. With the intent of giving lawmakers more budget flexibility, SB37 would have rerouted education property tax dollars to the state’s General Fund.
In his veto letter addressed to lawmakers, Cox wrote he was concerned the legislation would hurt public trust and potentially education funding. It also, he said, raised significant accounting and legal issues.
Right now, money collected through the State Basic School Levy on a Utahn’s property tax bill goes to local school districts. Republican Sen. Lincoln Filmore wanted to change that so the money would have gone to the state’s General Fund, an unrestricted account, first. The state would have given schools the same amount back, but potentially from a different, restricted, source.
Critics of the bill, including school business administrators, referred to it as washing money.
State Auditor Tina Cannon, the Utah State Board of Education, the Utah School Boards Association and the Utah School Superintendents Association all asked Cox to veto the bill.
The governor told lawmakers he has an “eye to improving the public’s trust in you and me and the institutions we represent,” something he said is eroding across the country.
“When it comes to trust, nothing is more critical or sacred than the way we handle taxpayer dollars.”
Cox outlined several issues in his letter, including that citizens are told that local property tax dollars go to their local schools.
“SB37 represents a clear departure from this practice by moving those dollars into the state’s general fund, with income tax revenues replacing them before they go back out to districts,” the governor wrote. “At a minimum, such accounting creates a perception problem as we lose the direct connection between taxpayers and their neighborhood schools.”
Cox also wrote that moving money from a restricted account into an unrestricted account, “creates significant technical and legal questions.” He added it was unclear if those property tax dollars would still be protected for education use when they went to the General Fund.
“Without that clarity, future legislatures could easily redirect those funds to other priorities and away from Utah schoolchildren. I oppose that change.”
That was one of the main arguments from critics. They argued that with this change, the state’s public education system might lose out on future gains to state revenue.
Additionally, Cox wrote this would create accounting challenges for school districts and the state. This would cause financial statements to look inflated and cause confusion for taxpayers, bondholders and auditors.
“Utah has earned a reputation for being one of the best-managed states in the country. Part of that reputation comes from keeping things simple, clear, and transparent. I worry that this bill puts that at risk.”
The bottom line, Cox wrote, is that he worries “this bill sends the wrong message to our schools and teachers about the value we place on our education funding.” While he commended lawmakers for how much they have funded education historically, he added “I would never do anything that would undermine our shared commitment to education funding.”
On social media, state school board member Sarah Reale thanked Cox “for listening to your unified Utah State School Board members who requested this veto. This bill was bad, sneaky, and irresponsible. Grateful it won't be signed into law.”
In a statement, the Utah Education Association, the state’s largest teachers union, also applauded Cox’s decision not to weaken local control. “Utah must preserve education funds for their intended purpose: supporting the success of Utah’s public school students,” the organization wrote in a social media post.
The union, as well as other critics, believed the bill was a response to the Legislature’s failed attempt in 2024 to remove the constitutional earmark that designates that the state’s income tax revenue can only be used for education and certain social services.
In addition to the veto, Cox signed 75 bills on March 24. This included the bill overhauling general education at Utah State University. In a statement, Cox said he was “thrilled Utah State University is taking the lead to pilot a redesign of general education through the new center for civics excellence.” He said it would be a model for all public institutions in Utah and across the country.
