Look for a state personal income tax cut coming this year, says Utah House Speaker Greg Hughes.
Hughes, R-Draper, tells UtahPolicy that even though there are all kinds of demands for spending in this 2018 general session because Utah would get a “windfall” of income taxes coming via federal tax reform, Utahns should expect “some tax relief” before lawmakers adjourn March 8.
“I think we’ll see a lowering of the rate,” said Hughes. Currently, both the state personal income and corporate tax rates are 5 percent.
But because of various deductions and tax credits, most Utahns see an effective tax rate of around 3.4 percent or 3.5 percent.
In addition, says Hughes, public education will see significant increases in spending – both through the traditional Weighted Pupil Unit and changes in property tax assessments/equalization.
Hughes says it’s his personal belief that when all is said and done, lawmakers will adopt a revenue estimate in new taxes from federal reforms of around $80 million – the high end of previously discussed windfalls coming.
Maybe not all of that will come in tax relief on the state income side – but much of it will, said Hughes.
A few other interesting tidbits coming from the speaker:
He is in favor of Utah doing away with the death penalty.
Rep. Gage Froerer, R-Huntsville, introduced such a bill just days ago.
Said Hughes: “I think opposing the death penalty is, or should be, a conservative stance.”
Conservatives have a natural mistrust of government, especially big, overreaching government.
And the ultimate act of government is taking someone’s life – especially if it is a mistake.
“If government makes a mistake on the death penalty, you can’t take it back,” said Hughes.
While some GOP legislative leaders are worrying, worrying that the state Tax Commission and economists may not have enough information to accurately predict state tax revenues in the face of the massive federal tax reform, Hughes isn’t stressing over it.
“Our (tax revenue projections) are 18 months out always. There is always a margin of error.”
Utah is going to have a lot more money next year – both through natural revenue growth because of the state’s good economy, $69 million in savings already cut from state base budgets, and the windfall from federal tax reforms.
“We’ve put $830 million more into public education over the last three years,” said Hughes.
And while he doesn’t have a number yet for new monies going into public schools in the 2018-19 budget to be adopted this session (which starts June 1), it will be significant.
In an op-ed piece published Wednesday in The Salt Lake Tribune, the three major backers of Our Schools Now – Zions Bank CEO Scott Anderson, Utah Jazz owner Gail Miller, and former business exec Ron Jibson – basically shot down any agreement with the GOP Legislature this session to end their petition to raise taxes slightly for public schools.
That means Republican lawmakers may go ahead – in some manner – to blunt the OSN petition effort.
And pumping in a lot more money for schools and cutting income taxes (while the petition seeks to slightly increase income and sales taxes) may be a way to head OSN off at the polls.
In addition, Hughes is looking to run for governor in 2020 (he’s retiring at the end of this year).
It could be a feather in his future political cap if he can lead a tax cut effort in his final year as speaker.
All that said, Republican lawmakers have seen four or five years of significant growth in the state budget – even with the needs of public education.
And even a small tax cut in the 2018 legislative election year – with all 75 House seats and 15 Senate seats up – would be good local politics now.