What’s happening with tax reform in Utah?
Some state legislators have contended that three challenges threaten to topple the state’s ability to collect taxes in a way that will allow us to pay for even basic state costs in the near future, including strong population growth, changes in the way people spend money and an outdated tax structure that constitutionally dedicates that all income tax streams to education spending. The contention is that it is not the amount of tax revenue generated, but rather the current tax revenue structure that is the problem
During the 2019 state legislative session, Utah’s Legislature failed to pass a bill (HB 441), which would have created sweeping changes to our tax structure, after a groundswell of public opposition over the proposal to tax services brought voting to an impasse. Instead, they passed HB 495 to create the Tax Restructuring and Equalization Task Force to study possible statewide tax reform.
Over the summer, the Task Force held multiple town halls on a “listening tour” of Utah to answer questions and take public comments with the goal of creating a new legislative proposal to vote on in a special session in late 2019 or perhaps during the 2020 general session. While Republican legislators insisted that lowering the rate and broadening the base is the solution, Democrats questioned the need for tax reform at all, and advocates and community members across the spectrum fretted over the impact to businesses, services, Utah’s poor and a dedicated stream of income for our education system.
More recently, some legislators stated that the issue might be too complicated to settle quickly and that there may not be a vote any time soon on the issue, perhaps not before the 2020 elections.
A new tax reform plan
However, on Friday, legislators announced a new tax reform plan after all, as well as intentions to move forward with a special session to get the new plan instated before the start of the new year. Still on the docket is the proposal to tax services, though the list of services is more tailored than in the original proposal, proposals to end certain sales tax exemptions and a proposal to lower income tax. The plan drew criticism from poverty advocates over the inclusion of a hike in food sales tax and concern from education advocates over how changes to income tax would impact education spending.
Room for public feedback
The new tax reform proposal is not set in stone! The tax reform task force will next hold a series of meetings on the recommendations at the state Capitol with the first coming up right away on Tuesday, October 22, as well as on November 7 and November 21.
WHAT YOU CAN DO
- Read through the new tax reform proposal and compile your questions and comments
- Attend an upcoming tax reform task force meeting at the state Capitol on Oct. 22 (at 4:30p in 30 House Building), Nov. 7 and Nov. 21 and listen in and give public comment. Find meeting notices and materials on the Tax Restructuring and Equalization Task Force page on the state legislative website, including a proposal by Sen. Hillyard and Rep. Gibson and another by Sen. Fillmore.
- Meet with your state representative and state senator to express your concerns or get your questions answered. NOW is the time to reach out by phone or email to your legislators.
- Write a letter to the editor or oped to state your opposition or support for the proposal.
- Submit a public comment through the task force website at StrongerFutures.utah.gov.
HB 441 was proposed by Rep. Tim Quinn (R-Heber) during the 2019 State Legislative Session, proposing taxes on a variety of services to modernize the tax structure and provide needed future revenue. The measure ultimately failed after bitter debates and strong opposition from service industries. As a result, a legislative task force was created to come up with recommendations for a new bill. A special session is planned for later this year to implement the task force’s recommendations. If a consensus cannot be reached by then, a bill will be introduced during the 2020 State Legislative Session.
Utah State Legislature’s Tax Restructuring and Equalization Task Force
The Tax Restructuring and Equalization Task Force was created by legislation via HB 495 at the end of the 2019 State Legislative Session to study tax reform and make recommendations to the Legislature. At the first meeting on May 30, the task force created a vision, purpose and guiding principles. You can find audio recording and materials from that meeting here.
Check out the tax force website at StrongerFutures.utah.gov.
Members of the task force include:
Appointed by Senate President Stuart Adams:
Senator Lyle Hillyard, Co-Chair
Senator Curt Bramble
Senator Kirk Cullimore
Senator Lincoln Fillmore
Senator Karen Mayne
Gary Cornia (Non voting)
Keith Prescott (Non voting)
Appointed by House Speaker Brad Wilson:
Representative Francis Gibson, Co-Chair
Representative Joel Briscoe
Representative Tim Quinn
Representative Mike Schultz
Representative Robert Spendlove
Kristen Cox (Non voting)
Steve Young (Non voting)
Past task force town halls (find recordings at StrongerFutures.utah.gov)
- June 25, Brigham City, Utah State University Brigham Campus, multipurpose room, 989 S. Main. Open house – 6 p.m. Town hall meeting – 7 p.m. Report from Utah Public Radio.
- June 27, Kearns, Chamber West Element Event Center, 5658 S. Cougar Lane (4800 West). Open house – 6 p.m. Town hall meeting – 7 p.m. Report from Deseret News.
- June 28, Richfield, Sevier County Fairgrounds, exhibit hall, 410 E. 200 South. Open house – 5 p.m. Town hall meeting – 6 p.m. Report from SL Trib.
- June 29, St. George, Dixie Tech, auditorium and lobby, 610 S. Tech Ridge Drive. Open house – 1 p.m. Town hall meeting – 2 p.m. Report from St. George News.
- July 8, Kaysville, Davis Tech, Business Resource Center, main conference room, 450 S. Simmons Way. Open house – 6 p.m. Town hall meeting – 7 p.m.
- July 9, Roosevelt, Crossroads Senior Center, 50 E. 200 South. Open house – 6 p.m. Town hall meeting – 7 p.m.
- July 20, Moab, Grand Center, 182 N. 500 West. Open house – 1 p.m. Town hall meeting – 2 p.m. Report from Moab Sun News.