Tax Reform Proposal Ran Aground At 2020 Utah Legislature. What Happened?

Mar 29, 2020

Credit KPCW Radio

A few months ago, it looked like the biggest decision from this year’s Utah Legislature would be a major tax reform package.

Then, just a few days into the 2020 session, it fell apart. 

Last week,  we heard comments about it from Summit County officials, and a major sponsor of the tax reform, District 54 Representative Tim Quinn.

On Wednesday, Summit County Council Member Kim Carson reviewed the story during a report to her colleagues on the 2020 session.  

She said lawmakers had been concerned because income tax,  which goes for education, had increased by nearly a billion dollars.   But gas and sales taxes, which fund many other priorities, had gone down.

A special session in December approved a tax reform package, but she said, that also included restoring a full sales tax on food.

A citizens petition drive looked like it had obtained enough signatures to take the tax reform to the ballot.    And within a few days after the Legislature began, lawmakers dumped the reform bill.

Carson said a substitute bill was passed, which will go to this November’s ballot.      

“It automatically adjusts public-education funding to keep pace with growth and the number of students and inflation.  It provides a safety net for public education funding to weather an economic downturn.  It dedicates money for public education by funding the minimum-school program through a fund that constitutionally may only be used for public education.  And it also gives voters the opportunity to determine whether to expand the use of income-tax revenue to support children and then individuals with disabilities.”

She said the bill also increases the Weighted Pupil Unit by 6 percent, and taps into the T.H. Bell Scholarship Fund.

KPCW this week asked Rep. Quinn if it’s likely the issue will resurface.   He said yes, though it may be several years down the road.      

“And some people have said that the bill we passed, reforming how we fund education, was tax reform.  I vehemently disagree with that.   It was spending reform.  Didn’t change revenue sources at all in the state.   Admittedly it does give the Legislature much greater flexibility with tax policy.   But it was still not tax reform, so I believe you’re right, that it will have to be re-visited.  It may be 5 or 6 or 7 years before it becomes necessary again because of the flexibility we gave ourselves.”

He said he hopes they will look again at the issue of sales tax on services.     

“There needs to be a serious look at how we implent that or how they implement that, so that business inputs are not taxed.  But that is the way of our economy.   We thought back in 19, I think 33 or 35 that sales tax on goods was a good idea and a good way to tax those who are really using services.  And we don’t buy goods like we used to, we buy services.   So it’s gonna have to be looked at.  But I think if the voters pass the referendum, or the constitutional amendment in November, it will give the Legislature several years before it has to be addressed.”

District 54 Rep. Tim Quinn.