SALT LAKE CITY — Newly sworn-in House Speaker Brad Wilson began his first few minutes on the dais Monday calling for an even greater challenge than Gov. Gary Herbert gave lawmakers in his budget proposal.
Rather than working toward a $200 million net tax cut, Wilson said he's suggested legislators now working on writing a tax reform bill to shoot for a bigger cut to the sales tax rate while broadening the tax base — one he said would be the "largest single tax cut in Utah's history."
"A $200 million tax cut is good," Wilson said. "Something great would be to deliver the largest single tax cut in Utah’s history, to the tune of at least $225 million."
Without a tax "restructuring," Wilson said, Utah will run into financial trouble down the road. Utah's general fund will be "gobbled up," he said, "and we will be unable to fund roads, public safety and basic government programs."
"This work will not be easy, but it must be done," he said.
On top of calling for tax reform, Wilson also wants another big change: a new state office building.
"I believe it is time to strengthen the ties between the people of Utah and our seat of government. Due to its location, the Capitol complex isn’t particularly accessible," Wilson said. "And because I don’t want to begin my tenure as speaker by inciting riots in the gallery, I won’t even think about articulating how fun it is trying to find parking up here."
So, Wilson said he's urging the Executive Appropriations Committee to work with the Capitol Preservation Board to draft a proposal to replace the state office building with "a new facility where Utahns can come to experience a deeper connection to our state’s rich history, as well as solve the parking problem."
Senate president
New Senate President Stuart Adams devoted much of his opening day speech to history, calling Founding Father Samuel Adams, for whom his grandson was named, "a cool guy. He reminds me of so many of you."
Adams mentioned taxes only in passing, asking senators to "imagine a sustainable, broad, fair tax system" among a long list of challenges that also included improved air quality and health care that is affordable for all.
Also on the Senate leader's list to envision is "the old state office building removed and replaced with a new building, with additional parking, allowing the public more functional access to their state Capitol."
That statement elicited a brief murmur among obviously surprised senators before they began applauding. Adams also took the opportunity to remind senators Utah has been selected by the U.S. Olympic Committee to bid for a future Winter Games.
Later Monday, Adams told reporters he was surprised to hear the House speaker talk about a $225 million tax cut in his speech. He said it was the first time he'd heard the proposal.
"We haven't talked yet, but I assume we will if he put it in his speech," the Senate president said, adding it is too soon to talk specifics.
"To try to actually fixate on an exact amount, I think that's problematic on the first day of the session," Adams said. "I think we're going to try to get there but exactly how it's going to end up ... we're a ways from making those final decisions."
Record-setting tax cut
Wilson told reporters later Monday he arrived at the $225 million number after realizing there was a $220 million tax cut about a decade ago. He said he saw an opportunity for lawmakers to "do a meaningful tax cut in that same range" but aim a little higher.
"I just thought it was a good reminder that we could do something significant here," Wilson said.
The new speaker stressed he didn't want the broader effort to get lost amid questions of the size of the tax cut.
"Whether it's $200 million or $225 million in terms of a tax cut, there's a bigger effort here," Wilson said. "The more important piece of this is what comes first, which is fixing our broken tax structure and broadening the base and lower the rate. If we accomplish that or when we accomplish that, then it gives us a lot of options in terms of what we can do to help citizens keep more money in their pockets."
Wilson, however, didn't have specifics yet on exactly how the state could broaden its tax base, other than suggesting there could be new taxes on goods that have shifted to a more service-based economy, such as landscaping services or entertainment streaming services like Netflix. Others have also mentioned the possibility of broadening taxes to ride-sharing services like Uber and Lyft.
Wilson also hinted the cut could come from sales tax, income tax or both.
Herbert called for enough money to come from imposing sales tax on enough services to lower the state's current 4.7 percent sales tax rate to below 3.9 percent when combined with a $200 million tax cut. It's not clear how much the rate would need to lower to achieve a $225 million tax cut, because Wilson said it would depend on how much lawmakers could broaden the base.
Just how much in new sales tax collections Herbert's plan would require has been estimated at between $600 million and $800 million, although those figures do not take into account the $200 million his budget sets aside for a sales tax rate cut.
Reps. Tim Quinn, R-Heber City, and Robert Spendlove, R-Salt Lake City, are working with the Senate to develop proposals, Wilson said.
"I think sometime in the next week or two you'll see some proposals start to come out, but there's a number of options," the speaker said.
The other new proposal made Monday was for replacing the 1950s-era office building that sits north of the Capitol and stands out against the classic architecture of the rest of the complex.
It's not the first time lawmakers have considered tearing down what's known as the state office building. But previous plans made on the heels of a quarter-billion dollar remodeling of the Capitol were dropped after the 2008 economic downturn.
Adams said a new public parking terrace near the office building has already been recommended, but building that without addressing the aging structure would be a "Band-aid" on the complex.
A price tag for the project has not yet been made public, but the Senate president said it could be built over several years. He said any plans would include a review of what agencies needed to located at the complex.