Lawmakers eyeing changes to how roads are paid for

Road construction01

Get ready for a huge change in how Utahns pay for the roads they use.

Utah House Speaker Brad Wilson, R-Kaysville, told the Utah Taxpayers Association pre-legislative conference Tuesday morning that within five years lawmakers will adopt various new methods of imposing “user fees” on drivers/vehicle owners.

While Wilson was not specific, it’s likely Utah will move to some kind of mileage measurement method of assessing vehicle use — like having your mileage measured at the time of vehicle reregistration and then levying a fee based on road use.

Utah is a large geographic state, and so it’s also likely accommodations will be made for rural Utahns who drive by and large more distances than some urban dwellers.

Still, big changes must come, said Wilson, as the state’s main road funding source — the per-gallon gasoline tax — becomes more and more outdated as electric and hybrid vehicles make up more of the statewide driver base.

Wilson, Senate President Stuart Adams, R-Layton, and Gov. Gary Herbert, addressed the conference, discussing what may be coming in the 2020 Legislature, now just under three weeks away.

Utah “is the brightest star on the flag,” said Herbert, as he listed the economic and educational achievements that place the state at the top nationally.

All three leaders defended the Legislature’s adoption of a broad tax reform bill in a December special session, signed into law by Herbert.

“We have the lowest tax obligation in the last 27 years,” said Herbert, and there are fewer state workers since 2001, showing the greater efficiency of government employees.

Just one example: The wait at Division of Motor Vehicle offices used to be around 15 minutes; now less than 5 minutes.

The recent opposition to tax reform is misguided, said Herbert, with many citizens not understanding what exactly was passed and how overall low- and middle-income Utahns will be much better off under the new tax system.

In fact, low-income families will get all kinds of new tax breaks, while those making over $75,000 a year won’t see the food tax credits less wealthy families will see.

And, he added, you will be able to get “pre-tax” rebates/tax credits, the first of which should be seen in paycheck withholding later this month.

The often repeated, but little understood, “structural imbalance” in state revenue sources can be seen in where the new $682 million tax surpluses that legislators will divvy up this upcoming general session:

— Of the $482 million in new revenue surplus, $442 comes in the personal and corporate income taxes, while only $40 million comes in the sales tax.

Something had to be done to balance out the sales-tax-driven General Fund and the income-tax-fed Education Fund.

The best way to do that was by imposing the full state sales tax back on unprepared food — which will bring in at least $250 million more dollars.

Various credits and rebates and tax rate cuts will offset that increase, and be to the benefit of low- and middle-income Utahns.

Meanwhile, public education has been very well treated by the Legislature over the last decade, Herbert added.

Its basic funding has gone from $2.6 billion 10 years ago to $4.9 billion in his new budget, which will be revealed Wednesday morning.

What citizens are hearing from critics of tax reform, some of whom have started a referendum drive seeking to repeal the changes in a November election, and newspaper headlines “doesn’t tell the whole truth,” said Herbert.

Adams said what Utah government, along with citizens and business owners, have achieved over recent years is nothing short of amazing.

While nationally the U.S. economy has grown 53 percent (based on GNP) since 1997, Utah’s economy has grown 97 percent, best among the states.

The recent tax reform “has fixed our structural imbalance,” by raising the sales tax revenue and cutting income tax by at least $160 million, and by some estimates, more than $300 million as that money circulates through the economy, said Adams.

Wilson said Utah is the best state for upward mobility of its citizens — “Perhaps the greatest badge of honor” among all of the praises the state is earning these days.

Putting new money into public education, air quality and other needy programs “is not easy work.” But it was done by farsighted legislators and Herbert because it is needed, said Wilson.

Looking back future Utah leaders will be thankful lawmakers acted now, “and took this important step” in tax reform, he added.