A group of elected Utah officials meet on Monday. The meeting will be about changes to how and what Utahns pay taxes on.
In Utah, income tax collected by the state is earmarked to be spent only on public and higher education. Gas tax is spent on transportation needs. The rest of the state’s entire budget is funded by sales tax. In the past few years sales tax has grown but not at the same rate as income tax, leaving a disparity that could put stress on public services provided by the state. Legislators on both sides of the aisle agree that tax reform is needed in order to keep up with the population growth, and a changing economy.
During the 2019 Utah legislative session Wasatch County and Park City representative Tim Quinn ran a tax reform bill that ultimately didn’t pass. Quinn, a Republican, now sits on the Tax Restructuring and Equalization Task Force. Quinn emphasized that his purpose in tax reform is not to raise tax revenue.
“We’re not saying we have a shortage of funds in the state of Utah," Quinn continued. "We’re just saying we don't have enough money in the general fund. (The general fund) funds roads and prisons and courts and Medicaid and state parks. Everything that we do outside of, primarily, education. We're not looking to raise funds were just looking to shift them.”
Quinn says there was a large amount of discussion about removing the restrictions that require that income tax go solely to education funds.
“I think that it's a viable option," Quinn explained. "If we put some type of floor into education funding statutorily that says all of the funds are going to be put together and we can divvy them out how the legislature sees fit, but we can never go below a certain percentage of the state budget to be funding education. That's a better guarantee to the education system than the one that we have now. Nothing prevents us from lowering the income tax rate, I mean theoretically we can even do away with the income tax. I'd rather see a true guarantee of a certain percentage of state budget.”
The task force held eight public meetings across the state seeking feedback from Utah residents on how they would like to see tax reform move forward. Quinn says at the meetings he heard many people approve of tax reform; so long as it didn’t significantly impact them.
“We heard a lot of that," Quinn said. "We understand the problem. We understand the solution. We think it's a good solution, just don't tax us type of mentality. There are those in the audiences who said we need to restore this full sales tax on food. I'm frankly opposed to that. I ran a bill in 2017 to remove sales tax on food completely. It passed in the House but did not pass in the Senate. There are those who are saying let's have a statewide property tax. I'm opposed to that, because we have so many who are on fixed incomes, young families that are just starting out, elderlies who I think it continues to damage them. We do have seven or eight or nine viable options that we will be considering in our working meetings. We know that we will have plenty of public input at that meeting."
The Democratic Party also held seven town hall meetings seeking input on tax reform. Quinn attended one of the meetings in Heber. A report generated from the Democrats town halls showed support for a carbon tax and a state lottery, while opposition to eliminating the income tax direct tie to education funding. Quinn says he heard different at the other meetings he attended hosted by the task force.
“I don’t know if I heard in seven of the eight meetings that I attended; anyone talk about a carbon tax," Quinn continued. "As far as a lottery yeah there were some fringe discussions about a lottery. I think that the main things that people looked at were the food tax, the property tax a sales tax on some services or even doing what we call a credit on the income tax form. It just shifts money from income tax to the general fund without raising any taxes.”
There’s a possibility that the legislature could be called into a special session by the Governor to pass tax reform when it is ready. Quinn says their focus is to pass the right tax reform bill in a timely manner.
“It does need to be done," Quinn said. "It does need to be done as quickly as possible. Because we do face some serious challenges with our budgeting restraints and where the revenue is coming from in the state. Social services, which is the largest portion of our budget, is paid for through the general fund; and the general fund is lagging behind.”
The legislative task force meets at the state capitol House Building room 30 on Monday at 4:30 pm.
