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Demos targeting firms’ tax breaks

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Sen. Ed Mayne, center and president of Utah AFL-CIO, speaks with Sen. Karen Hale while Rep. Karen Morgan, right, greets colleague.

Sen. Ed Mayne, center and president of Utah AFL-CIO, speaks with Sen. Karen Hale while Rep. Karen Morgan, right, greets colleague.

Laura Seitz, Deseret Morning News

Big business in Utah has been the recipients of big tax breaks, and now legislative Democrats and labor leaders are calling for some big changes.

Things like taking away some of the hundreds of millions of dollars a year in sales tax breaks given to corporations and requiring companies like Kennecott, one of the state's biggest users of electricity, to pay a utility franchise tax just like every other homeowner, hospital and church currently does.

Perhaps the biggest change would be to require the state Tax Commission to reveal how much companies are getting through various Utah tax breaks.

"Citizens should be able to find out how much of this largesse any given company is receiving," said Sen. Ed Mayne, D-West Valley and president of the Utah AFL-CIO. "Currently they can't, and that's an outrage."

Mayne was joined by House and Senate Democrats, Councilman Joe Hatch of the Salt Lake County Council and the United Steelworkers of America at a Wednesday morning press conference in the Capitol rotunda.

Mayne announced he would seek in the 2004 legislative session to repeal the recent sales tax imposed on cable and satellite television bills and replace the money in the state budget with revenue from eliminating sales tax breaks to large corporations.

"The cable TV-satellite tax was a tax on the little guy," Mayne told the Deseret Morning News, "and it was an unfair tax when you look at the hundreds of millions in tax breaks we give to corporations."

Mayne's plan won't have much of a chance of passage in the 2004 session without a groundswell of GOP support. In the 2003 general session, with the state facing huge budget deficits, Mayne tried to repeal some corporate sales tax breaks.

When Republican senators were finished with Mayne's bill, the corporate breaks had been restored. And to get enough revenue to balance the budget, Republicans added a cable TV tax and passed it. "It's true Utah needs to foster a business-friendly environment in order to attract investment and jobs," Mayne said. "But there's a critical difference between being business-friendly and doling out corporate welfare." Kennecott Utah Copper, a subsidiary of Rio Tinto, bore the brunt of criticism Wednesday. Hatch pointed out that Kennecott paid $2.8 million less in property taxes in 2002 than it did in 2001 because the value of its property declined $426 million. That decline in valuation came at the same time Kennecott netted $78 million in profits. Since 2000, Kennecott's property values have dropped 63 percent, based on valuations by the Tax Commission. The company reported $259 million in profits during that same period, according to figures released at the press conference.

"As your own property valuations are going up year after year, Kennecott's value is going down, down, down," Hatch said.

Part of the problem, they agreed, is there is no public oversight of the Tax Commission, either through the ballot box or sunshine laws. Utah tax commissioners are all appointed by the governor, who in turn receives large corporate donations from the very businesses for which the commission decides tax policy.

"Sunshine is a great disinfectant, and currently there's a lack of it in the assessment of corporate property in Salt Lake County," Hatch said.

E-mail: spang@desnews.com