Once again Utah legislators are talking about removing the sales tax from food. Once again, they won't do it.
Utah is only one of a handful of states which applies sales tax to the most basic of consumer items - unprepared food. Yet while states like Georgia and Missouri have eliminated or greatly reduced their food tax in the 1990s, Utah has not.Legislators in the 1990s in this state have cut property, income and the general sales tax rates, but they've left the food tax whole even though in different legislatures both Republican and Democratic lawmakers have sponsored repeal.
This year, Sen. Michael Waddoups, R-Taylorsville, and Senate Minority Leader Scott Howell, D-Granite, have teamed up to co-sponsor a bill that would remove the hated tax over the three-year period starting in fiscal year 2000.
"Our effort does not impact the 1998-99 budget, which, while we haven't voted on it yet, has its (revenues) basically set," Waddoups told a Senate committee Friday morning.
Waddoups is realistic.
"Will my bill pass this year? No. But I think I can get it out of committee and to a floor debate. This is a long process. You have to convince people - almost convert them - to this cause; just like I was converted to it a year ago," Waddoups said.
Gov. Mike Leavitt said Friday that he doesn't think the food tax repeal bill will pass, so he won't have to consider it.
And Senate President Lane Beattie and House Speaker Mel Brown said about the same thing - not this year.
It's a refrain that food tax opponents have heard for years - nearly 30 years.
Sen. Howard Nielson, R-Provo, remembers his first food tax fight. It was the 1969 Legislature and Nielson was the newly elected House majority leader. "We had to increase the state sales tax that year, huge shortfalls" in revenue, he recalls.
"I had a plan to increase the sales tax by 1 percent, but remove the whole (state portion of the) tax from food. But we lost by one vote" in a House committee, Nielson said.
And so the food tax stayed.
And stayed when residents tried to remove it through petition 10 years later.
And stayed when then-independent candidate Merrill Cook tried to repeal it through a public initiative in 1992.
And stayed through half a dozen attempts to repeal it legislatively during the late 1980s and early 1990s.
Removing the food tax used to be a Democratic issue. But starting several years ago GOP legislators began sponsoring this or that method to get rid of it.
Waddoups said he made several changes to Howell's original idea and then agreed to sign on as co-sponsor for the 1998 effort.
"This is not and should not be a Republican or Democratic issue. It is a bipartisan attempt to remove the tax that affects the poorest among us the most," Waddoups said.
Waddoups cited state Tax Commission figures that show that the poorer you are, the greater percent of your income goes to pay sales tax on food.
If you make $10,000 a year, 25 percent of your income goes to food. If you make $150,000 a year, only 5 percent of your income goes to food.
At $10,000 a year, you pay $220 a year in food sales tax. If you make $150,000 a year, you buy more expensive food (maybe more food, also) and pay $393 a year in food tax.
But, obviously, $220 a year means a lot more to a low-income family than $400 a year means to a wealthy family, Waddoups noted.
His plan is to give every Utahn filing a state income form a $40 "food tax credit" on their 2000 tax returns. For 2001, each citizen would get an $80 income tax credit. By 2002 the food tax would be repealed at the cash register and there'd be no income tax credits, just lower food costs via the sales tax repealer.
Waddoups raises no other taxes to offset the lost revenue. It would cost between $30 million and $35 million a year to remove the tax. With Utah tax revenue growth climbing at around $100 million a year over the last several years, "we'd just absorb the $30 million in new tax growth," says Wad-doups.
"I know there is the old argument that some people pay no property tax (they don't own a home) and no state income tax (they don't make enough to pay it). So the food sales tax is a way to get them to contribute. But I've come to the conclusion that it's OK for a small part of our society, the poorest part, not to pay any tax at all, not contribute," he said.