Various groups, including the Salt Lake Chamber of Commerce, are talking these days about tax hikes for statewide needy programs, like roads and mass transit and public education.
Tax increases, of course, are always touchy subjects in Republican-dominated Utah.
Many Utahns will see on their November property tax bills hiked by local city, county or school district entities.
Taken together, some of the hikes are substantial.
And local entities are going through Truth in Taxation public hearings right now. (A fine wrap-up is seen in this Salt Lake Tribune article.)
Tax hikes for statewide purposes are approved by GOP Gov. Gary Herbert and the Republican-controlled Legislature.
All 75 members of the House and half of the 29-member Senate face re-elections in 2014. And historically you don’t raise taxes in an election year.
In addition, House Speaker Becky Lockhart, R-Provo, may be looking at running for governor in 2016; she will retire from the House at the end of 2014.
So she may not want a tax hike on her record in 2014. (There has not been a general tax increase since Lockhart first came into the House back in 1998.)
Many politicos say look not at the 2014 general session for a tax hike, but perhaps in the off-election year of 2015.
Arguments are now being made for more revenues for Utah roads, for mass transit support (there is now a half-cent sales tax for Utah Transit Authority) and for public education (Utah continues to rank last among all states in per-student financial support).
Civic leaders say that both adequate roads and well-educated workers are matters of economic development and a strong local business environment.
The question is, will the Republicans on Capitol Hill agree to any tax increases, and if so, how will they be structured?
Lockhart and other GOP leaders like to point out that a number of the state’s 41 school districts still have property tax leeway under the legally-set caps.
In other words, some districts can raise more money through their property taxes, but decline to ask their patrons for that extra cash.
Likewise, there’s an argument that lawmakers and Herbert should just give local counties and cities the authority to raise the gasoline tax, or sales tax, or some other taxing power and let them increase revenue for their own local roads, known as Class B and C streets.
Indeed, some local government leaders are saying they will take the political heat for some tax increases if the Legislature will give them that authority.
But such local tax hikes are nibbles around the edges.
Utah schools could use $300 million or $500 million more.
On many rural state roads the Utah Department of Transportation has stopped, because of lack of funds, any general maintenance.
UDOT officials are basically filling potholes to keep the roads safe, but they aren’t making any headway in normal maintenance or reconstruction.
One recent study found that Utah needs to spend an extra $11 billion on roads over the next 25 years.
And many of the state roads’ bridges are becoming, or are, worn out.
UDOT will soon begin the final stretch of I-15 reconstruction, from the Point of the Mountain into northern Utah County.
But after that is done, I-80 needs to be rebuilt on the eastern side of Salt Lake County.
All this talk of tax increases has one group worried: The Utah Taxpayers Association, a non-profit entity mainly funded by businesses which historically opposes most tax hikes, especially property taxes.
Royce Van Tassell is vice president of the group. Utah state Sen. Howard Stephenson, R-Draper, is its president.
Van Tassell tells UtahPolicy that the UTA stands firmly against any tax hike for public education. Reform, and a lot of it, must come first, he believes.
But the association is willing to consider supporting some kind of tax hike for roads – the general feeling being that Utah’s economy won’t grow if the transportation system is a mess.
“Transportation funding is extraordinarily difficult” to reform and still make it fair, says Van Tassell.
Oregon is experimenting with a pay-by-the-mile system, which is already being used by many of that state’s government employees.
But if you tax a vehicle owner by how far he travels, is Big Brother going to watch where you drive? Or what if you drive a lot out-of-state, and your car’s odometer doesn’t reflect your in-state real travel that you are taxed upon?
Utah currently has a per-gallon gasoline tax paid at the pump, which was last raised in the mid-1990s.
As road construction costs go up, and as cars and trucks become more and more fuel efficient, the per-gallon tax has fallen further and further behind.
Just raising the per-gallon tax is wrong-headed, says Van Tassell. “The per-gallon tax is an anachronism” – just way out of date and ineffective as a revenue source.
Whatever kind of road tax is raised, says Van Tassell, the state’s corporate and personal income taxes should be reduced by a similar amount, so that overall state government is not taking more money from businesses and citizens.
But, of course, by the state Constitution, all income tax revenues go to public and higher education.
So offsetting the gas tax would actually harm public education spending.
That’s not likely, even in penny-pinching Utah.
Van Tassell says that within a week, the new “school grading” tabulations will become public.
Florida several years ago started ranking, or grading, each public school.
The poorest performing students in Florida are low-income Hispanics. Before Florida’s grading experiment started, the average low-income Hispanic child was below the average Utah child in school performance.
But in a recent evaluation, the Florida Hispanic child had surpassed the Utah child, showing, says Van Tassell, that grading schools and then putting pressure on administrators and teachers to do better with their students will work.
Others may disagree.
But you can count on the Utah Taxpayers Association and those like them who dislike most tax hikes to put political pressure on Utah legislators not to raise taxes for public schools.
“There is a wealth of research that says Utah’s experience will be the same (in school grading); that there is no correlation in the amount of money spent on (public) education and student achievement,” claims Van Tassell.
Many teachers and school administrators don’t accept that. And Democrats continue to pound Republicans over the relatively low spending in Utah schools.
“You grow the size of the (economic) pie, and inevitably you have additional dollars come to public education,” says Van Tassell.
The public education and road funding issues will only continue to grow over the next few years.
And if the 2014 Legislature doesn’t look at tax hikes/reforms for either of these costly programs, look for more pressure to come in 2015.