Yesterday the Utah tax reform task force held what was supposed to be a final meeting on a controversial policy to overhaul Utah’s tax system (find meeting materials and audio recording here). After three hours of public comment, mostly opposing the proposal and calling for more time for the public and legislature to better understand the policy and its full implications, the committee did not vote on the measure, and instead announced a new hearing on December 9th. The aim is to hold a special session in December for a final vote by the State Legislature.
The primary controversy revolves around these issues:
- The tax reform bill is coupled with a proposal to eliminate the constitutional requirement to spend income tax money on K-12 and higher education. Any such proposal to amend the Utah Constitution would need to be passed by the state legislature and voted on by the people in the 2020 election. A plan was presented last night to use property tax for education spending with supplemental state funding to equalize property tax between districts.
- The proposal includes a hike in the state’s sales tax on food, a regressive tax, with the attempt to compensate low income Utahns with an end of year tax credit that fails to account for the day to day burden this tax would impose.
- A recent report by the state’s Office of Legislative Research and Council shows that lower income Utahns will actually experience higher taxes, even after the income tax cut, disproportionate to other income brackets. Even with other tax credits offered to vulnerable populations, such a state Earned Income Tax Credit, it is unclear if the overall proposal is still regressive.
- The original tax reform proposal relied on sales tax levied against services. Although the public fought back against many of these service taxes, the tax reform task force chair, Sen. Lyle Hillyard, criticized the direction his own tax proposal had taken last night for moving away from taxing services.
The nonpartisan Utah Citizens’ Counsel issued a letter to Gov. Herbert last week asking for postponement of a vote and additional study on the proposal for six critical reasons. You can speak up too.
WHAT YOU CAN DO
Are you concerned that legislators are rushing into a vote? Do you have outstanding concerns about the tax reform proposal? Do you want your voice heard on tax policy in Utah? NOW is the time to speak up!
- Attend the December 9th hearing at the State Capitol in person or listen in live online. Find details and materials for the meeting at the tax reform tax force’s committee page. Prepare in advance if you want to give public testimony.
Utah 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 the task force’s meetings here.
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)