Gov. Gary Herbert gave an upbeat State of the State address Wednesday in the Utah House Chamber – saying despite drought, wildfires and other problems in 2018, “The state of our state is strong, it is resilient and our outlook is very bright.”
Yeah, like a $1.3 billion revenue surplus that lawmakers and Herbert will be looking to spend over the next 45 days.
And give at least a $200 million tax cut, as well.
In fact, Herbert wasted no time in upping that amount to $225 million – which new House Speaker Brad Wilson called for in his Monday opening day remarks. The largest tax cut in Utah history.
“Maybe I should up him by wanting $226 million, but I won’t do that,” Herbert joked.
“With positive job growth in every sector, Utah is now the healthiest and most diverse economy in the nation today.”
But with that growth comes a host of challenges, he said, listing a few:
— Education excellence and crowded classrooms.
— Affordable housing.
— Congested roads.
— Protection of open spaces, for once gone, gone for good.
— Air quality.
— And water quality.
All of which can negatively impact Utah’s quality of life – which is now among the tops in the nation.
While the $1.3 billion surplus is great, he said. But “let’s not assume that this surplus is the new normal.”
In fact, it’s unlikely to reoccur if the national and Utah’s economy slows over the next few years.
With loud and large citizen protests already coming to the Capitol over Prop 3 – full Medicaid expansion adopted by voters in November – Herbert said expansion should come in April – but with some “improvements.”
That will be a hot fight as the general session continues.
Sales tax reform must come, he said. While buggy whips (not in big demand) has the sales tax on it, Uber and Lyft rides do not.
He gave this example: If a group of 10 friends in 1980 had a restaurant dinner, seven of the ten would help pick up the tab (70 percent of sales were taxed).
But today, only four of 10 would pay the tab, and six would walk out free of cost.
“Common sense tells us that is patently unfair,” and the sales tax system must be updated, he added.
House and Senate GOP leaders will take up that difficult task this session. And with a sales tax rate cut, the process can be revenue neutral, and much more fair to all.
“As we broaden the tax base, we will slash the state sales tax rate. We will cut it by 64 percent from 4.85 percent to a mere 1.75 percent. That is a tax cut of $225 million, especially benefitting lower and middle-income families. This would mean that nearly nine out of ten taxpayers will pay less sales tax tomorrow than they pay today.”
But GOP legislative leaders are talking about a large personal income tax cut, not a sales tax cut.
And some difficult negotiations lay ahead.
Herbert wants a 4 percent increase in the public education budget, via the Weighted Pupil Unit.
But education advocates want more than 6 percent.
We’ll see how that works out as the budget is put together.
“When I meet with students, I am impressed by their intelligence and curiosity. But frankly, I have been disturbed by some of the rising generation’s fascination with socialism.”
He supports a bill that would require financial, free-market education in schools.
He wants to get rid of dirty, polluting state vehicles – and $100 million for other air quality improvements.
Recalling the hard workers of the transcontinental railroads – many minorities who were not recognized in that accomplishment – Herbert said: “We can and we should do more to protect the nameless, the outcast and the vulnerable.
“Even in times of deep division and discord, even when some naysayers are betting against us, great things can be envisioned and can be accomplished.
“We can work side-by-side, sunup-to-sundown, with the spirit of cooperation to lay a foundation for our future prosperity.
