After legislative leaders pulled the plug on a bill to address what they view as a tax revenue sourcing problem, the Tax Restructuring and Equalization Task Force was formed this past legislative session to take the issue back to the drawing board.
The tax task force is made up of legislators and policy wonks and has scheduled eight public input meetings throughout Utah this summer. Rep. Tim Quinn, a republican from Heber and the sponsor of the 2019 tax bill, is a member of the committee. He says he’s heard from people who are confused about what the state is trying to address.
“So many of the people in the meetings that we've attended over the last week or so keep talking about, well, if you need more money, if you need more money," Quinn said. "We don't, in my opinion and most of the legislative opinions, we don't need more money, we just need it coming from a different source.”
The issue boils down to this: while income tax, which, constitutionally, legislators can only use for education funding, has grown, sales tax, which funds everything else, has not. That’s due to the way people spend money nowadays—Quinn says people are no longer buying stuff but instead services, which the state doesn’t collect tax on. His bill, HB 411, reduced the overall sales tax rate but placed it on a wide range of services, from landscaping to legal counseling. Quinn says the task force won’t keep the same structure of HB 441, though there are some ideas he’d like to pull from it.
“People who are on social security and what they can earn before we tax those benefits, we were going to increase that threshold, which I think is a good thing for the seniors in the state," Quinn said. "There was the restoration of the child tax exemption that was taken away during the federal reform of 2017 that would be a big savings for families in Utah.”
There are plenty of options on the table for the tax revamp, including a constitutional amendment to remove the income tax educational earmark; instituting a carbon tax; and raising the statewide property tax. Quinn says he hasn’t picked any favorites yet, but he is leaning strongly against one suggestion: restoring the full tax on food.
“We all have to have food—we don't tax pharmaceuticals because they're lifesaving, and I would argue there's nothing more lifesaving than food," Quinn said. "If we restored it back on food, we'd be one of I think only eight or nine states in the country that do that, and I think we can come up with a better solution than hurting families who are striving to maintain a family budget and put food on the table for their families and their kids.”
Legislative leaders initially announced tax reform would be addressed in a special session later this year, with the input received from the town halls informing the policy discussion. Quinn isn’t sure when the special session would take place, or if the tax restructuring will actually happen during the 2020 general session instead. But Quinn says another comment he’s heard from the public is why does the Legislature need to change the tax law now? Quinn says, while Utah’s economy is good, it’s better to stop kicking the can down the road.
“Many do argue that this is not a rush, this is not a priority or a crisis, and it's not a crisis yet, but it will be in two or three more years," Quinn said. "I just don't think we wait two or three more years to come up with a solution. Let's do it now, while we have the opportunity to do so.”
The next tax reform task force meeting is July 8, 6 p.m., at the Davis Conference Center in Layton. It will also be livestreamed on the legislature’s website. There aren’t any official tax task force public meetings scheduled for the Wasatch back, though the Utah House Democrats have planned their own tax reform town hall in Heber City on July 16, 6:30 p.m., at the Wasatch County Senior Center.