Utah's Democratic Party may support the ballot initiative to remove the sales tax from food, setting up a classic political confrontation with GOP Gov. Norm Bangerter.
State Democratic Chairman Peter Billings Jr. says a decision on support won't be made until the State Democratic Convention June 23. But Billings and other leaders, including members of the Democratic Policy Commission, are leaning toward recommending to convention delegates that Democrats embrace the food tax issue.If Democrats adopt such a position, that crushes any chance of a huge, unified opposition forming this year like the umbrella group that opposed the tax reduction initiatives of 1988. (See related story this page.)
There would be one large proviso to the Democrats' support, however. "We couldn't afford to cut state programs, such as higher education and human services," said Billings. "And certainly, local governments, which get part of the sales tax, couldn't afford to take a $15 million to $20 million cut. They'd have to be made whole somehow."
And that's where Democrats would run directly counter to Bangerter. The governor said last week he opposes the removal of sales tax from food - the state can't afford the estimated $90 million cut in revenues. He promised that if voters approve the removal, he'll cut state budgets next year to make up the lost revenue. He won't consider raising some other tax to offset the loss, he said.
While Democrats have tried to remove the tax via legislative action, it took Merrill Cook's new Independent Party of Utah to gather the 69,000 signatures of registered voters to get the initiative petition on the ballot. Cook's petition doesn't talk at all about offsetting revenue losses. It only calls for the removal of the sales tax from unprepared food items. If approved by voters, the food tax wouldn't come off until July 1, 1991, giving the Legislature six months to deal with the question of lost revenue.
State GOP Chairman Richard Snelgrove guesses his party's platform will remain silent - neutral - on the food tax issue. "Thus, we won't be opposed to the governor's position," he said.
Billings and other Democrats would like to see the state income tax re-bracketed and, in the process, raise most or all of the $90 million lost to the food tax.
Bangerter doesn't face re-election this year. He has another two years on his second term. But all 75 House members are up for election, as are 15 of 29 senators. Billings clearly hopes to turn the food sales tax issue into political advantage if his party will endorse the measure.
"Sales tax off food has been a Democratic issue for years," said Billings. "We've tried (in the Legislature) time and again to remove it in a phased-in process. The Republicans always refuse." Republican lawmakers hold heavy majorities in the House and Senate.
"I'd be glad to talk to anyone about how we can make this thing work," said Cook. "But I'm not interested in any general tax hike. This is a tax cut. We can make up lost revenue through state surpluses, and we believe there could be as much as $100 million in surplus this year. We can eliminate 15 special sales tax exemptions that would raise $34 million. Surpluses plus doing away with some exemptions could easily raise what's needed."