While Utah legislative leaders are working hard to come up with a tax reform package that can go to lawmakers in a fall special session, the urgent push is not shared by voters in general, a new Utah Political Trends survey from UtahPolicy.com and Y2 Analytics poll shows.
House Majority Leader Francis Gibson, R-Mapleton, told UtahPolicy.com Tuesday that it is still his goal to have a tax reform package ready for a fall special legislative session.
But, he adds, it may be that the best solution, for now, is a workable reform that gets Utah’s tax system through the next five or 10 years.
“It may not be a 20-year solution,” said Gibson, who is the House co-chair to the Tax Reform Task Force, a group of 10 legislators from the House and Senate, both parties, working this summer and fall.
In other words there could be tax system tweaks called for down the road.
The new poll finds:
38 percent of voters say tax reform should be a “high priority” for the Legislature, controlled by Republicans, and GOP Gov. Gary Herbert.
36 percent said it doesn’t need to be a high priority, it can be a “low” priority for the state bosses.
And 26 percent don’t know.
Looking at partisan breakout:
Republicans, both “strong” and “not so strong,” give more emphasis to tax reform, 48 percent and 44 percent, respectively, want something done now.
Political independents are less sure, only around a third say it should be a top priority of the Legislature and governor.
While Democrats are split.
Gibson said after a number of hearings around the state, his task force is ready to make some tough decisions. He believes that can be done over the next month or so.
Whether a majority of the GOP House and Senate caucuses will go along and provide the votes is another matter.
2020 is an election year for all 75 House members and half of the 29-member Senate.
So it is best, politically, for the Republicans to find the 38 votes needed in the House GOP caucus and the 15 needed among Senate Republicans to get this done in a fall special session.
If not this fall, then it drops to the 45-day general session which starts the end of January.
“In a general session” even big, important matters like tax reform “can be drowned out,” said Gibson.
While nothing has been taken off the table as far as tax reform, said Gibson, he adds that “pyramiding” taxes is not the way to go, the public hearings told him.
“Pyramiding” is where business inputs are subject to sales tax, as is the final manufactured product.
For example, if you are making a wood product, the manufacturer would be taxed on the raw wood and then the retail customer is taxed for the dining room table.
The tax reform package – if one can be found – will be developed by the House and Senate Republican caucuses, along with Herbert’s administration.
Whatever is passed by Republicans, it likely could be a campaign issue next year in legislative races, and especially in the governor’s race.
For example, should the GOP bosses decide to reimpose the state sales tax on unprepared food – something that former Gov. Jon Huntsman got taken off in the 2000s – then in a Lt. Gov. Spencer Cox/Huntsman GOP gubernatorial match-up next year that could be a campaign issue.
The poll finds, in general, that Republicans and conservatives want the Legislature and Herbert to act now – or with a “high priority” – while Democrats and liberals don’t want tax reform now.
The Legislature in its 2019 session put aside $75 million to give a tax cut, which would come with tax reform.
On top of that, for the first few years of tax reform, no new dollars would be brought into state coffers – or the tax reform would be neutral.
The state has an estimated $97 million tax surplus (while the state sales tax is lagging behind the income tax), and it would be tough to fight for tax reform while running such surpluses.
But down the road, especially of the state sales tax is extended to include all kinds of services that are now not taxed, like haircuts, Uber rides and attorneys’ fees, then more sales tax would be brought in than under the current state tax system.
The Y2 numbers show Utahns are willing to talk tax reform. But how voters will feel about specific changes can only be measured after the task force makes its recommendations and lawmakers meet to make final decisions.