Will the 2016 Legislature Cut Taxes? Hughes Says ‘No’

Greg Hughes01Utah House Speaker Greg Hughes has not yet seen a proposal to cut taxes in the upcoming 2016 Legislature, nor does he anticipate one.

“We had a $16 million shortfall in the General Fund” last fiscal year; Hughes told UtahPolicy in a wide-range interview recently.

“We may have a surplus in the education fund” in the current year’s budget.

“But we need to very careful” about any tax cuts in 2016 – an election year for GOP Gov. Gary Herbert, all the 75 House members and half of the 29-member state Senate.

And it’s always nice in Republican-controlled Utah to give some small tax cut in an election year. But so far, said Hughes, he hasn’t heard of any such bill or plan coming forward.

Nor is it likely to have any significant tax hike in the Legislature.

Lawmakers raised the gasoline tax by five cents per gallon in the 2015 Legislature (the hike takes effect Jan. 1, 2016).

And they raised the property tax by $70 million (administered by the 41 school districts) this year as well – the money going to a new equalization program for school capital improvements.

And the mostly conservative legislators did this in the 2015 general session that saw more than $700 million in one-time and on-going tax surpluses.

Come the 2016 session legislators won’t have anywhere near those tax surpluses – more in the line of $200 million.

So, don’t expect a tax cut nor a tax hike in 2016.

The public education reform group Education First and other pro-education entities have been talking for several years about increasing K-12 revenues.

But with both Herbert and most of the 104 part-time legislators seeking re-election in 2016, don’t look for any significant income tax reform/tax hike measures this coming year.

Should Herbert win re-election next year this certainly would be his last four-year term. Look to 2017 as a good time for the governor to propose – or agree with – some Education Fund revenue increases.

But the 2016 general session will have any number of important issues to deal with besides taxes, said Hughes.

With the death of the latest GOP Medicaid expansion plan – Utah Access Plus – in October, that thorny problem will now go into the 2016 Legislature.

But Hughes recently told his 63-member House Republican caucus that Medicaid expansion won’t dominate the upcoming session.

“It will be just one spoke in the wheel” of issues that must be dealt with, Hughes said.

Other spokes, Hughes told UtahPolicy:

— Look for a large public school room technology initiative coming forth. In the 2014 session, the late-Speaker Becky Lockhart proposed spending $300 million on getting each Utah public school student a laptop or tablet in their hands – with learning software that would engage and teach kids.

— More and more citizens are asking their legislators to permit the use of medical marijuana – prescribed by a licensed doctor.

“There are some areas in the federal code that don’t jell well” medical marijuana state programs, said Hughes. “But I think we may deal with” getting really sick Utahns some use of medical marijuana.

— Watch for state regulations on police use of body cameras. Each police district is making their internal rules now, and that doesn’t seem to be working very well.

“We have a police-involved shooting and their body camera is not turned on. Why?” Perhaps the state can step in and outline areas for use and operation.

— A connecting issue – How are internal and external investigations conducted when police activity is questioned?

“We want to make sure a fair eye examines” police shootings or other controversial actions. “Today, everyone has a video camera on their phone, and the public is worried. We need a standard of trust.”

Utahns likes their law enforcement, said Hughes. But there are some issues out there that could use legislative attention.

— In the 2015 Legislature lawmakers set up a new special water development trust fund, but put only a little money in it.

The big issue for 2016 is finding a funding source for that revolving trust fund, said Hughes – a source that could provide hundreds of millions of dollars over the next 30 years.

The state has the authority to levy a property tax. But doesn’t now – it just tells local school districts what their property taxes may be, in the case of public education.

“I think you will see the various water districts come together” in 2016 and develop a funding plan through 2040.

The billion-dollar-plus pipeline from Lake Powell across the bottom of Utah to St. George will be part of the plan, said Hughes.

But how or when that pipeline is built will not be specified – that work will come later, he said.

The federal government used to provide much of the money to build local water projects. But that money is going away, said Hughes, as Congress faces near-impossible budget red ink.

“Where do we pick up that federal contribution?”

“We want to make a strong appropriation” to the new water development trust fund in the 2016 session.

“I don’t think you will see a tax hike for this. The question is how do you responsibly prepare for water development over the next 60 years.”

Conservation will be a part of the plan. “Wasting water has to have a cost to it,” said Hughes.

And perhaps the state will step in to require conservation efforts – like banning watering during the hottest parts of summer days, or paying higher water rates for parts of the days.

— Air quality has been quit in recent sessions. Partly because our winters have been mild over the past few years and there isn’t the gunk in the air during January, February, and March when lawmakers meet.

“But gasoline refining – Tier III – is a big issue we need to address,” said Hughes. “We want cleaner burning fuels to be refined in Utah before the federal deadlines.”