Bernick column: GOP leaders push to overhaul the Utah’s sales tax system

Republican Gov. Gary Herbert and GOP legislative leaders are on a mission this legislative session – which ends in just four weeks.


They are determined to overhaul the state’s sales tax system – broadening the base (placing the sales tax on many more, if not most, services in Utah) and lowering the state and local option sales tax rates accordingly – to make the whole reform “revenue neutral.”


Politically speaking, this is a heavy lift – as they say these days about something that could have serious political consequences.

In four weeks – three, considering we aren’t going to see any specifics on this herculean task until the end of next week – these normally-cautious politicians are going to undertake changing the whole way sales taxes are applied in Utah.

House and Senate Republican leaders, and Herbert, too, all said in various public statements Thursday, that this will get done before the 2019 Legislature adjourns midnight March 14.

Senate President Stuart Adams, R-Layton, told his daily press briefing that he’s counting on the local media to get out the message that Utah’s sales tax system is seriously flawed, and if something isn’t done soon, down the road the state will see a funding “crisis.”

Herbert, in his weekly media briefing later Thursday, used the same word – “crisis.”

The political and public relations problem is this: It’s hard to make the case that Utah is currently in a sales tax funding crisis.

In fact, taking in various tax funding sources, the state this year sees a $1.3 billion tax surplus.

Budgets up and down the state appropriations process will see large increases in spending — $100 million more for air quality control, 4 percent and more for public education ($400 million in cash), decent pay raises for state employees, including judges. And on and on.

And Herbert and his GOP legislative counterparts are going to give at least a $225 million tax CUT this session – reportedly the largest in the state’s history.

Utah state government is having a sales tax “crisis?”

I won’t go through all the economic reasoning for reforming the state and local sales tax base. For this column, suffice it to say I accept all that the state economists, governor and legislative leaders are saying: To wit, Utah doesn’t tax enough services. And as the state, national and world economies change to service-based over production-based, the sales tax base is shrinking.

Soon to follow, the sales tax revenue to governments will shrink, also – at least as compared to income and property taxes – the three-legged government revenue stool that must be kept balanced.

But if politicians are relying on local reporters to make their case in overhauling a major tax – one paid millions of times a day in all kinds of purchases by voters, well, that might be difficult.

Officeholders are on shaky ground if they count on the media to do anything that will end up helping officeholders – even if news outlets will be carrying stories about what Herbert et al. are warning.


Herbert and legislators would be much better off with some kind of public relations/education campaign.

Even though the governor is correct when he told reporters Thursday that policymakers have been talking for years about the state’s shrinking sales tax base, citizens are not seeing the urgency, much less a “crisis.”

GOP legislators, as a group, don’t have much money in their House and Senate PACs.

But Herbert, in his 2018 year-end PAC report, had $533,000. And he’s held at least one big fundraiser since.

The governor may be well served to cut a TV and radio spot explaining to Utahns – directly — the need to reform the sales tax now.

And there are good reasons for doing so.

Not the least of which is the very fact that the state DOES have more than $1 billion in tax surpluses — and so can afford some tax displacement that comes with reform — and leaders ARE going to give a $225 million tax cut.

Spreading out a lower-rate sales tax to hundreds, or thousands, of services, from haircuts and massages, to tax preparation and attorney bills, to Uber rides and plastic surgeries, is going to be fairer for everyone.

And, Herbert told reporters, who wouldn’t want to pay a small bit more on a number of services you buy and see, in total, a tax bill of $1,000 less in 2019?

But Herbert doesn’t need to convince me.

He and the 104 part-time legislators need to convince more than 3 million Utahns, who might start exercising their voices when they see a sales tax on a service purchase receipt they never saw before – regardless of the $225 million tax cut also coming their way.

Remember the Utah citizen tax revolt of 1987-88?

I do.

I wonder if the governor does; if many GOP legislative leaders do.