If you listen to the leaders of the state's new Tax Reform Task Force, big changes are likely coming: Maybe the income/sales tax system will be junked for a consumer tax; or a flat rate income tax that doesn't give a break for home-mortgage interest or child deductions.
"There are no sacred cows" in a comprehensive review of Utah's whole tax system, Sen. Curt Bramble, R-Provo, said Monday morning at the first meeting of the 15-member task force. Every idea or current tax exemption is on the table.
"I've been known to upset a few apple carts and hope to do that this summer. Hold on, we're going to be busy," said Rep. Wayne Harper, R-West Jordan, who co-chairs the task force with Bramble.
But the reality may be much different; special interest and/or personal politics will undoubtedly come into play.
"We can get this study done" in time for comprehensive recommendations for the 2006 Legislature, which convenes next January, said House Minority Leader Ralph Becker, D-Salt Lake.
"But will we? You can only hope," he added.
Harper said after the first two-hour meeting that he, too, believes "major" recommendations can be accomplished by the next general session. If not, more work will be done after the 2006 Legislature, he said.
But 2006 is an election year for all 75 House members and half of the 29-member Senate. And will legislators want to impose major tax changes — and possible tax burden shifts — just before residents vote on their re-elections?
If work isn't completed by the 2007 Legislature, Gov. Jon Huntsman Jr. faces re-election in 2008.
While it was only the opening session of the task force, a clear conservative theme was heard. Republicans outnumber Democrats on the task force 10-3. (The other two members are a state tax commissioner and Huntsman's deputy chief of staff.)
Government doesn't always have to have more revenues, or be immune from economic downturns, said Rep. John Dougall, R-Highland.
"If citizens have less money in which to pay" a tax bill because of earning less money from one year to the next, "it's unfair to hold them to the same taxing level and not hold government harmless. Government should reduce" its spending accordingly, said Dougall.
That may sound reasonable. But one of the goals of the task force is to help "stabilize" the state's tax revenue. In other words, not have taxes go way up in good economic times, go way down in bad.
One reason the task force was formed by Huntsman and the 2005 Legislature is that an in-depth tax study by former Gov. Olene Walker released last December shows that the tax bases of the state's two main sources of revenue — the individual and corporate income tax and the sales tax — are actually decreasing.
A perfect storm appears to be coming, said Sen. Howard Stephenson, R-Draper. Stephenson has worked for the Utah Taxpayers Association for 28 years and been in the Senate for 13, he said.
"I've never had more hope for significant, important changes in the Utah tax structure," Stephenson said. New leadership in the House and Senate, a new governor dedicated to "helping Utah's tax and regulatory system to make it attractive for higher-paying jobs," a dwindling tax base and a changing economy are all combining at one time, he said.
But Senate President John Valentine, R-Orem, a tax attorney, warned that there are only two ways for the task force's recommendations to end; two "immutable laws" of tax reform that can't be changed:
"If you are going to have revenue neutrality —taxes not going up or down overall — you will have winners and losers. Some people will pay more, some pay less" than now.
"And if you make any real changes" to a current tax system, to simplify or make it more fair, "you will have either revenue increases (to government) or decreases."
Tax reform can't be a code word for tax increases, warned Valentine. He personally won't vote for that. "We can reduce taxes and still meet our goals" of reforming Utah's tax system.
E-mail: bbjr@desnews.com