Herbert casts doubt on tax cut this year

Gary Herbert 06

The chances that Utahns will see a tax cut or rebate from this Legislature dimmed a bit Thursday, when GOP Gov. Gary Herbert told reports, “I don’t know” if tax relief is coming now.

Without strong support from the top leader on Capitol Hill — and as UtahPolicy.com first reported, Republican lawmakers are looking at creating new “savings accounts” for the General Fund and Education Fund — the chances are waning that the Legislature will give tax relief despite huge revenue surpluses.

Herbert spoke at his monthly KUED Channel 7 press conference at some length about the Coronavirus and its possible effects on Utahns individually and the state’s now-speeding economy — which has generated $921 million in tax surpluses this year and for next year’s budget.

A few months ago, it would have been generally agreed among GOP lawmakers and Herbert that they were going to give at least a $160 million income tax cut this session.

Then the tax cut was part of the huge tax reform package that lawmakers and Herbert installed in a December special session.

But after voter blowback — including a likely-successful tax reform repeal voter referendum — it was repealed the second day of the 2020 Legislature.

February revenue updates showed even MORE tax surpluses coming next fiscal year, which starts July 1.

Herbert said if a tax cut is coming, top on his list is restoring the full dependent exemption — in Rep. Tim Guinn’s HB260 — which was taken away in the 2017 Trump administration’s tax relief law. Quinn’s bill would provide a $51.5 million ongoing tax cut by restoring the full exemption to individuals and families.

Just Thursday, Rep. Travis Seegmiller, R-St. George, introduced a bill that would reduce the state income tax rate from the current 4.95 percent to 4.75 percent. That, he said, would give a tax cut of around $200 million, but by adjusting that tax rate, legislators could give back any amount they wish. “We are starting horse-trading” on whether to give a tax cut, and if so how much it should be. “I start with a rate that is in the ballpark,” said Seegmiller, of the available tax surplus available.

But Herbert added there is wisdom in setting up new “savings” accounts with the hundreds of millions of dollars in tax surpluses, waiting for the new (likely Republican) governor in 2021, and dealing with tax cuts as part of a new tax reform effort when the effects of the Coronavirus will be known on the Utah and U.S. economies.

Herbert said Utah is and will be “well prepare” if the virus hits here — which it likely will to some extent.

U.S. Sen. Mitt Romney, R-Utah, has said the Trump administration is not ready to deal with the virus outbreak.

Herbert didn’t go that far but added that he’s not relying on the federal government leading the way in fighting it. While he believes the feds will do their job, Herbert said it is up to his administration and the state health department and all the county health departments to lead the way in protecting Utahns.

“We will hope for the best, but prepared for the worst,” said Herbert.

Some other issues discussed in the KUED Channel 7 press conference:

— Herbert said he supports Trump’s re-election, adding the president has done a number of “really good” things for Utah. However, when the nation’s governors met with Trump several weeks ago, Trump singled out Herbert, saying Utah can keep Romney, “We don’t want him” — an embarrassment to Herbert.

Herbert said sometimes Trump is “petty” and “juvenile” in his comments and actions, and he wished the president wouldn’t tweet “at 2 a.m.” But the governor added he doubts Trump will moderate how he acts and what he says — and Trump will get his vote.

Speaking of Romney, at this weekend’s quarterly meeting of the state GOP Central Committee, there are several resolutions calling to “censure” Romney, even to demand he resign, for voting guilty on one House article of impeachment of the president.

A similar “censure” resolution in the Utah Legislature has been squashed by House GOP leadership, as has a bill that would have set up a recall method to remove a U.S. senator from office.

Herbert, whose office makes him an official member of the Central Committee, said he has a conflict with the CC meeting and may not be able to attend. But if he was there, he would oppose and vote against those resolutions.

“I’ve seen firsthand” that Trump is angry with Romney), the president’s comments before the governors meeting, but added that the Utah GOP shouldn’t “censure” or demand Romney resign. “That is not correct” action by the state party, said Herbert.

Herbert said he had little to do with the pending compromise for GOP legislators to change parts of the Prop. 4, Better Boundaries, independent redistricting commission, first reported by UtahPolicy.com

But he supports what he’s heard, and likely would sign it into law.