Cox vetoes bill that would have allowed property tax revenue for schools to go to state general fund

Gov. Spencer Cox has vetoed a bill from the 2025 Utah Legislature that would have fundamentally changed the way the state looks at property tax revenues.

Citing “public trust, sending the wrong message to educators, and accounting and legal problems,” Cox nixed SB37, a controversial bill that would have allowed property tax revenue, historically used only for public schools, to be diverted into the state’s general fund and used for any number of other purposes.

As is presently constituted, about $842 million collected from local minimum basic rate property taxes goes directly to school districts for education funding. However, with SB37, sponsor Sen. Lincoln Fillmore, R-South Jordan, wanted to change the law to create “more budget flexibility” and to “equalize” funding across school districts.

Under SB37, the property tax revenue would go directly to the state’s general fund. After receiving the money, the Utah State Board of Education would then have 35 days to transfer an equal amount into local school district accounts.

The bill would allow the board to use income tax dollars, which are required under the Utah Constitution to be reserved for education expenses, to replace those property tax dollars in the state’s general fund before money would be distributed to school districts.

While opponents, notably the state’s educators, argued SB37 would jeopardize future education funding, Fillmore said it wasn’t just “a clever way” for state leaders to “steal money from public education.”

“The bill requires that whatever money is collected, the exact same amount of money in the exact same time frame, with the exact same funding flexibility, is distributed to school districts as soon as it’s collected,” he said.

The Board of Education was a major opponent of the bill. As the Legislature’s general session ended, the board passed a resolution urging Cox to veto it. One board member, Sarah Reale, described the bill as “really fishy” and “money laundering,” according to a Salt Lake Tribune report.

Cox wrote in justifying his veto that State Auditor Tina Cannon requested a veto of SB37 in the interest of keeping the process “simple, clear and transparent.”

“I worry that this bill puts that at risk,” Cox’s statement said.

“Even if I were to ignore these legal and accounting issues, I also worry that this bill sends the wrong message to our schools and teachers about the value we place on our education funding,” Cox wrote.