To health advocates, it seemed like a very good idea: a 26-cent-per-pack tax increase on cigarettes with the money earmarked for drug treatment and education programs.
And, they reasoned, not only would the tax increase target those who burden Utah's health-care system the most, but it would discourage countless thousands of teens from taking up the habit.Good idea or not, what Sen. Delpha Baird, R-Holladay, discovered when she presented her cigarette tax bill to the Revenue and Taxation Committee was out-and-out hostility. Her bill was voted down by a 5-1 margin.
The issue, observed committee chairman Sen. Lyle Hillyard, R-Logan, was not one of health vs. smoking but one of revenue. "It's just too hard to argue for a tax increase of any kind when we have a $200 million-plus surplus," said Hillyard, the only member of the committee to vote for the increase.
As they do every year, Utah lawmakers are wrestling with a smorgasbord of tax bills, some that would cut taxes, others that would raise taxes and yet more that would shift tax burdens around. But when all the dust settles, in all likelihood few, if any, of the tax measures will become law.
What makes this year's cry of "no new taxes" different than in the past is the combination of re-election politics (all of the House and half the Senate are up for re-election in November) and a whopping $53 million surplus this year and $220 million in new money projected for next year. Lawmakers on both sides of the aisle are unusually reticent to suggest any tax increase at this stage of the game.
Rep. Tom Matthews, D-Price, is one lawmaker who doesn't care much about the political consequences of tax increases. He's proposing a $10 per bicycle tax on the sale of new adult bicycles, the money from which would be used to mitigate the impacts of mountain biking on rural communities.
The as-yet-undetermined amount of revenue would go into a restricted account from which counties could apply for funds to build garbage facilities, restrooms and pay for increased law enforcement.
"I look at it as a user fee (not a tax increase)," Matthews said. "Mountain bikers cause a lot of impact and don't pay a whole lot for the privilege. This is a way for them to pay their own way and hopefully improve the environment for mountain biking."
Maybe so, but there is little support for the bicycle tax. The argument? The same as used to defeat Baird's cigarette tax increase.
Similar opposition is expected on other pieces of legislation. Some lawmakers want to see the fees the state charges for disposal of PCBs increased from $4.75 a ton to $28 a ton. Other lawmakers want to see an increase in telephone surcharge fees from 10 cents a month to 25 cents a month.
Other lawmakers would like to see a "sandwich tax" - a local-option sales tax increase to benefit tourism-impacted communities such as Moab, Park City, St. George and Cedar City. Another proposal calls for a $1 increase in vehicle registration fees to pay for a computer system to track uninsured motorists.
Among the more controversial proposals this session, Gov. Mike Leavitt will soon announce his plan to eliminate sales-tax exemptions for certain Utah companies and industries - a move that will raise more than $4 million next year. Leavitt prefers not to label the elimination of tax exemptions as a tax increase, but rather a tax equity issue. To the companies affected, though, it will be viewed as tax increases.
If there is a tax increase this year, House Majority Leader Marty Stephens, R-Farr West, says it will likely be paired with some kind of tax decrease. For example, the Utah Department of Transportation has not let up on its plea for more money to begin rebuilding I-15 in Salt Lake County - the most heavily used stretch of interstate in Utah.
Stephens said lawmakers could accommodate UDOT with a gasoline tax increase but only if offset by a sales-tax cut. A proposal under consideration would eliminate the "flood tax," which was tacked onto the sales tax about 10 years ago. That would return $50 million to taxpayers.
The gasoline tax could then be raised about 5 or 6 cents, or about $30 million. The net effect of the so-called "tax shift" proposal would be a $20 million tax cut, Stephens said.
Other proposals to decrease taxes include new deductions for public school teachers who spend their own money buying teaching materials, a deduction for parents with dependent children in foster care, exemptions for medical equipment used at home and even a tax exemption for people who buy gun safes.
Any tax increase - or decrease, for that matter - is not likely to get a particularly warm reception from Leavitt.
"We need to resist the temptation of nickle-and-diming our citizens to death," said Leavitt, who has not taken a position on any of the tax bills. "I do believe that parts of government are better run on a user-fee basis, but we must be very cautious."
Cautiousness would dictate that 1994 is not the year to raise taxes. But Hillyard has been around long enough to know that anything is possible.
"The problem with having too much money is that expectations are too high," he said. "And at the end of the session, there's never quite enough to do everything. So there is a real temptation to pick up a little money here and there (through fee or tax increases) to meet those expectations."
PROPOSED TAX, FEE INCREASES:
SB1 - Increases cigarette taxes by 26 cents per pack and hike taxes on other tobacco products.
SB45 - Increases the fee for PCB disposal to $28 per ton, up from about $4 per ton.
SB93 - Imposes an "unrelated business income" tax on exempt organizations.
HB33 - Imposes a $1 hike on vehicle registration fees to create a computer database to identify uninsured motorists.
HB65 - Create a new top bracket for individual income taxes.
HB156 - Imposes a $10 fee on bicycle purchases to pay for mountain bike impacts.
ESTIMATED REVENUE TO THE STATE:
SB1 - $22.4 million
SB45 - no estimate available
SB93 - no estimate available
HB33 - $1.4 million
HB65 - $4.5 million by fiscal 1997
HB156 - no estimate available
PROPOSED TAX DEDUCTIONS, EXEMPTIONS:
SB13 - Allows a health insurance premium tax deduction for the self employed.
HB27 - Creates a tax exemption for home medical equipment.
HB45 - Provides tax deduction to parents with a dependent child in foster care.
HB54 - Creates a tax exemption for the purchase of gun safes.
HB66 - Modifies property tax credits allowable for certain homeowners and renters.
HB162 - Repeals the flood control tax portion of the state sales tax.
ESTIMATED REVENUE LOST TO THE STATE:
SB13 - $4 million
HB27 - $843,700
HB45 - $55,000 from the Uniform School Fund
HB54 - $54,000
HB66 - $200,000 from the general fund
HB162 - no estimate available yet