clock menu more-arrow no yes

Filed under:

MERRILL COOKS UP FOOD-TAX COALITION

Merrill Cook hasn't been known as a consensus builder. His political career reflects a man who decides what he wants to do and does it, usually not heeding advice along the way.

But Cook is trying to build coalitions this year on his sales-tax-off-food campaign. And he's starting with local government leaders.Removing the sales tax from food will cost the state between $80 million and $90 million. But since the local option sales tax - adopted by almost all the cities, towns and counties in Utah - also applies to food, local governments, in total, stand to lose between $15 million and $20 million.

"We understand that the (revenue) surpluses are coming to the state - maybe $100 million this year - and not the local governments," says Cook. "We'd like to hold them (local governments) harmless. So we support a diversion of the sales tax."

Cook suggests - it's only a suggestion and is not part of the initiative citizens will vote on in November on removing the food sales tax - that the local option sales tax be increased, the state sales tax decreased accordingly. That would take more money away from the state and give it to the cities, towns and counties. Overall, the sales tax rate would remain the same.

"We fully support a 1/16th diversion. That will give the local governments $11 million to $12 million more," Cook says.

There's a slight argument over numbers here. Cook says removing the sales tax from food will cost local governments, combined, about $15 million. So a 1/16th percent diversion would make up "70 percent of their loss."

The Utah League of Cities and Towns - the municipalities' lobbying organization - says it's more like $20 million. The current local option sales tax is 1 percent (with 1/64th percent going, temporarily, to build Winter Olympic Games facilities). One-sixteenth equals 0.0625. So the local option tax, under Cook's plan, would increase from 1 percent to 1.0625 percent.

State Tax Commission spokeswoman Janice Perry says it would take an increase from 1.0 percent to 1.12 percent in the local option sales tax to raise $20 million. "The food sales tax makes up different percentages of each (local) government's budget. On average, the food sales tax is 25 percent of a government's total sales tax," she said.

"We won't make them whole with a 1/16th diversion. But they'll be better off," says Cook.

He'll meet with league officials over the next several weeks, trying to get them not to oppose removing the sales tax from food. "My argument is two-fold. First, we'll support a 1/16th diversion in the Legislature. In fact, we're going to get a legislator to pre-file such a diversion bill (for the 1991 session) just as soon as pre-filing opens later this summer.

"Second, rural cities and towns will benefit from removing the sales tax. Our research shows that for every 15 cents that a rural government would lose in food sales tax, one dollar would remain in that community via lower taxation - that is, the citizen has one more dollar in his pocket because he doesn't spend it on the food tax, but the city loses 15 cents in revenue. We say that $1 in the private sector's pocket will really benefit that city more than that 15 cents." That $1 may go into savings, be used to buy a non-food item that remains subject to the sales tax or be used to expand a local business, he says.

"And we support a greater diversion, so that 15 cents would mostly be made up anyway . . . ."