Rep. Francis Gibson, R-Mapleton, is adamant that lawmakers will get a tax reform package done before the 2020 legislative session.
“We will have a special session this year,” he said firmly. “I’m not going to commit to a date, because I don’t want to set an artificial deadline, but we will have a special session.”
As Utah lawmakers prepare to tackle the complicated issue of overhauling Utah’s tax code, Gibson says the most significant hurdle they’ll face is educating the public on the urgency of the problem.
“We have to explain to the public why we need to do this,” he said during a Wednesday afternoon interview with UtahPolicy.com. “We have to explain the problem, and then we can start talking about solutions.”
Gibson, the House Majority leader, is also the co-chair of the special legislative task force given the mission to study ways to overhaul the state’s tax code. The problem facing them is at once simple and complicated. Utah’s tax code is out of balance. Income taxes, which go toward education, are booming because of the state’s good economy. Other taxes, including sales taxes which fund everything else, are not growing fast enough to keep up with demand.
“It’s a pressing problem that’s not far off,” says House Speaker Brad Wilson, R-Kaysville. “It’s a trend problem we need to fix. We need to think more than 3 or 4 years down the road.”
Wilson says the problem facing lawmakers is urgent, but it’s not a crisis. At least, not yet.
“I want to make people understand we’re just a few years away from having to take drastic action. We need to fix it now. In a couple of years, we won’t be able to pay for things like roads or air quality programs.”
This will be the second time lawmakers have taken a run at fixing that imbalance in the state’s tax code. HB441 proposed sales taxes on hundreds of services that currently aren’t taxed. Those new taxes, coupled with a drop in the overall sales tax rate would have been revenue neutral during the first year but would have raised millions of more dollars for the state in subsequent years.
Legislators approved the current task force after legislative leadership decided there wasn’t enough time to have a robust debate on HB411.
Gibson stresses the task force is not using HB441 as a starting point.
“This is not 441-plus,” he said. “We have no preconceived outcome in this process. All ideas are on the table. I’ll look at anything. Sales tax, gas tax, transportation tax.”
Those ideas could include taxing some services as HB441 attempted to do. Gibson says there are some in the legislature who would like to reinstate the state portion of the sales tax on food.
“One idea that’s gaining some traction is ending the constitutional requirement that income tax is spent exclusively on education. When I explain that we’re the only state that does that, people think it’s crazy. It would take a constitutional amendment to change it, but it’s something we should look at.”
Gibson says the plan is to hold public meetings in 7 or 8 locations around the state to get input and listen to ideas for fixing the state’s tax imbalance. He’s hoping to have those meetings complete by July.
Despite the focus on changes to the tax code, Gibson says he wants a tax cut to be a big part of whatever plan they eventually come up with.
“I don’t want this to be a tax increase. We want to come up with a tax code that promotes upward mobility where people aren’t paying more. We have to look at the long view.”
