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In our opinion: Don’t rush major Utah tax reforms

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Sen. Lyle Hillyard, R-Logan, left, and Rep. Francis Gibson, R-Mapleton, co-chairmen of the Tax Restructuring and Equalization Task Force, answer questions about a draft tax law change during a media availability at the Capitol in Salt Lake City on Friday, Oct. 18, 2019.

Ravell Call, Deseret News

Whether most Utahns know it or not, their Legislature is on the verge of a tax overhaul so large it would touch many of them in ways that are not yet clear.

The last thing the state needs is for this process to be hurried. 

Unfortunately, so far it appears to have been crafted mainly behind the scenes, with lawmakers making tweaks in hopes of finding a version that would receive majority support in time for a December special session.

Why the hurry? Why is December any better than waiting a month until the regular legislative session begins in January?

The official reason is so that the changes can take effect Jan. 1, making for an immediate transition that would help the state compensate for the lagging sales tax revenues that currently trouble legislators.

But that problem is more of a slow leak than an immediate crisis, and the proposal, as currently described, would include measures as drastic as removing the earmark for education from the state income tax, which would require voters to approve a constitutional amendment next November.

A poll commissioned by UtahPolicy.com last summer found only 30% support for such a change. A separate poll found nearly half of Utahns, 49%, oppose a hike in the gas tax. The latest tax reform plan would add about 12 cents to the price of each gallon of gas by making gas subject to the sales tax.

This reform proposal deserves careful and deliberate consideration, allowing enough time for all affected parties to study it and be heard. Lawmakers should clearly state what their backup plan is if voters rejected an income tax shift.

A basic rule of conservative thought is that the marketplace knows better than a handful of experts. In this case, the people who will have to pay taxes under any new plan would better know its impacts than the few who are working behind the scenes to reach a consensus among the people’s representatives.

If lawmakers go through a deliberative process and still believe unpopular proposals should become law, they at least would be doing so with full knowledge of the concerns.

Parts of the plan that have become public so far would add sales taxes to services that presently are exempt. It would restore the full state sales tax to groceries, which would have an immediate effect on poor and moderate-income families, despite a promised tax credit to compensate for the extra costs.

But changes to education funding promise to be the most controversial parts of the plan. So far, legislative leaders have talked about replacing the income tax earmark with an alternative funding source, but nothing specific has been released. Some talk has centered on allowing individual school districts more leeway to use their property tax authority to fund more than just the construction and upkeep of facilities.

However, this could be seen as a way for lawmakers to push the burden of school funding onto local districts, where the ability to raise money from property taxes varies widely depending on local property values.

These are complex and difficult issues. Gov. Gary Herbert took a careful approach during his monthly KUED news conference this week, saying he would support a special session only if major stakeholders, including educators, were in agreement.

Even then, we fail to see the need to hurry into a December special session, other than to avoid the potentially awkward political problem of dealing with tax reform during an election year. Utahns, who would be affected by tax reform in many ways — including by a proposed cut in the income tax rate — deserve a slower process.