For many barbers, carpenters, nurses and other citizens in licensed professions, next year's sales tax cut could be wiped out by increases in fees the state charges the numerous trades, professions and businesses it regulates.
The Legislature's Executive Appropriations Committee this week approved $1.4 million in fee increases for the Department of Commerce, which regulates businesses and professions, beginning July 1, 1995.Fee increases range from a $5 increase for a professional license renewal to a $250 rise in the cost of registering a mutual fund with the state Securities Division.
"It's a good way to do business if the fees cover the minimum mandatory requirements, otherwise it's a sneaky way to raise taxes and revenue," said House Majority Leader Marty Stephens, R-Farr West, who also sits on the Executive Appropriations Committee.
But most of the professional licensing fee increases for next year, which account for about 30 percent of the overall fee increases, came at the request of state-appointed licensing boards, said Sen. David Steele, R-West Point, co-chairman of the Business, Labor, Agriculture and Environmental Quality appropriations subcommittee.
"A group of boards made a presentation to the committee, requesting to raise fees so they could offer more services," Steele said, noting the Securities Division fee increases bring Utah in line with other states.
But Steele acknowledged that setting fees is not exact. And most of the time lawmakers set the fee higher to be certain it covers the cost of services.
Excess fee revenue not used to cover the cost of services goes into the state's General Fund. That means fees paid by the 50 licensed professions and occupations and by businesses making required filings and registrations also subsidize state programs.
The annual subsidy amounts to about $2.5 million, and commerce officials estimate it will reach $4 million this year because of an increase in the number of filings for licenses and other certifications.
"At one point (in committee deliberations) we looked at across-the-board cuts in fees," Steele said.
Instead, at the request of Steele's committee and on a motion made by Stephens, Executive Appropriations approved a study within the next year on how to bring fees more in line with the costs of services.