SALT LAKE CITY - The state's banking lobby, locked in a long-standing and often bitter political fight with Utah credit unions, has apparently seized on the shortfall in funding Utah schools as a new reason to start taxing CUs. The banks' move, contends the Utah Credit Union League, comes in a letter sent to members of the 15-member Utah Board of Education by a retired state legislator and director of a Layton bank who suggested the CU tax could be a source for new revenue following recent cuts in the Utah Office of Education. Haven J. Barlow, a former state senator and director of the First National Bank of Layton maintained he was not launching an attack on CUs but that his proposal would tax CUs "on profits that" are not distributed to their members. The Utah League called the Barlow idea "disingenuous" and said it represented "an attempt by the banking industry to use Utah's school children for their own designs." The real motive, said the League, is to limit competition and while taxing CUs might generate several million dollars in revenue for public schools, it also would eliminate $106 million that it saves members annually. League officials pointed out that the chairman of Barlow's bank, millionaire Kevin Garn and a former Utah House Majority leader, had lost the June 25 GOP U.S. Congressional primary race to a candidate, Rob Bishop, a Brigham City school teacher, who had received strong backing of the League. The tax-CUs proposal now before the Utah Board of Education is not likely to receive serious consideration until February at the earliest, said Patrick Ogden, associate state superintendent of education. That's because members of the board, comprised mostly of business executives and retired teachers, felt this was an issue that needed to come first before state legislators since "the consensus was they really did not have enough information" to make a judgment on the topic, said Ogden. The state legislature convenes in January. The Barlow plan, along with several others on raising $80 million in new revenue including eliminating child tax credits and changes on property tax levies, was brought up at an informal Sept. 5 meeting of the board with no votes taken. Ogden acknowledged that new revenue is badly needed for the department following a $45 million reduction on a $2 billion public education budget. "That doesn't sound like much but Utah spends less per pupil than any state," said Ogden. He said the department has been told by legislators that it needs to "become more pro-active" in finding new sources of revenue instead of consistently coming to the legislature pleading for more funds to finance public education. That is the reason the Board has put revenue generation as one of its chief tasks, said Ogden. -
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