The people of Utah may have just turned tax reform into a giant question mark. Organizers of a petition drive to put the reform package lawmakers passed in December on next November’s ballot told reporters this week they had collected at least 152,000 signatures.
Only about 116,000 signatures of registered voters, spread proportionally among 15 counties, were needed. With the lieutenant governor’s office bound to disqualify some signatures, and with the possibility that people could remove their signatures within 45 days, the cushion of 36,000 names might be enough for the drive to succeed. Only time will tell.
If it does succeed, that’s not a bad thing. Certainly, lawmakers worked hard to craft a reform bill against political pressures. Reform is needed because the state’s sales tax revenues, while growing, are not keeping pace with its income tax revenues. Income tax revenues are, according to the state constitution, earmarked solely for education. That means the state’s general fund, which relies on sales taxes to fund a variety of programs and services from prisons to highway construction, is having trouble keeping up with demand.
But the people’s right to overturn newly passed law, if enough general concern exists, is a cherished gift not every state provides. It acts as a check on lawmakers whose actions, for whatever reason, may have wandered from the desires of their constituents.
In this case, lawmakers should draw two lessons.
The first is that, when it comes to major legislation, they should be more open and inclusive from the beginning. Their first attempt at tax reform emerged last year with barely two weeks left in the legislative session, after weeks of rumors that a bill was being crafted behind closed doors. The hoped-for tactic seemed to be to quickly pass the measure without much public scrutiny. This fell apart when certain interested parties, mainly business owners who would be negatively affected by the bill, organized an intense lobbying effort.
That first effort died, but while lawmakers were more open in writing the bill that eventually became law — holding a series of hearings statewide — they insisted on passing it in a special session a month before the regular session. That didn’t afford the kind of scrutiny available in a 45-day regular session.
The second lesson is that Utahns don’t like laws that hurt low-income people. The tax reform bill that passed raised the state’s portion of the sales tax on groceries from 1.75% to 4.85%. While many low-income people qualify for food stamps and other assistance programs, many others don’t qualify for these and would find their budgets strapped.
The law’s inclusion of tax credits and a one-time check to compensate for this increase clearly wasn’t seen as adequate. An anticipated tax credit in April won’t mean much to someone who needs to eat now.
While it remains to be seen whether the referendum will succeed, these are lessons lawmakers should take to heart regardless. Good governing involves the open give-and-take of interested parties and a lengthy, deliberative process where important bills are concerned. And solutions should not unduly impact those least able to bear the costs.