Veteran observers and insiders are concluding that the 2020 legislative session is perhaps the most unique — if not the strangest — in modern history. Since your columnists are rather strange themselves, we’re well-qualified to explain the peculiarities.
What are some of the unusual dynamics surrounding lawmakers, advocates and lobbyists at the Capitol?
Pignanelli & Webb: “Voters don’t decide issues, they decide who will decide issues.” — George Will
Well, here’s a partial list of abnormal items, starting with Utah issues: Looming above the session has been the specter of a face-slapping referendum that gathered 150,000 signatures and repealed tax reform approved a month earlier ... a wacky revenue forecast of a huge surplus for the school fund, but tight constraints in the general fund ... numerous lawmakers facing intraparty challenges by opponents grumpy about tax reform ... the issue that never dies: Medicaid expansion ... disposition of another citizen initiative, this one creating a commission to redraw legislative and congressional district boundaries ... more marijuana stuff ... constituent pressures to lower pharmaceutical costs ... the never-ending inland port battle ... and legislative action sponsored by Republicans targeting a Republican U.S. senator.
And overshadowing the session are a couple of national issues: A roller-coaster stock market and recession fears caused by threat of a global coronavirus pandemic ... and a screwy presidential election in which a proud socialist could be elected. Whew!
What are the chances of tax reform, or even a cut? Anything else?
Pignanelli: I hope the pressures described above do not delay passage of this session’s most crucial legislation, SB103 and HB157 (sponsored by Sen. Gene Davis and Rep. Mike McKell, respectively), which allow Utahns participation in a wine subscription program from out of state vineyards. Life in Utah is great and could not get better — but this is would a wonderful benefit.
A surplus in the Uniform School Fund, combined with political environment, is the recipe for some tax relief. Because income tax is the most volatile of revenue sources, the fears of a recession may reduce the amount of the cut or creating a temporary adjustment, permanency dependent upon future conditions. The demands of Medicaid and basic state services are huge pressures on a general fund expanding at a lower rate. Thus, there will be some actions to increase the coffers of the general fund through the reduction of exemptions or other actions. The common feature of any such tax activity will be avoiding controversy.
Lawmakers are negotiating the details of a large transportation bond to fund road projects throughout the state. Although hotly contested among the various stakeholders, there will be some actions taken with the hope of reducing the cost of pharmaceuticals.
Webb: The truth is, given the threat of economic downturn from the coronavirus, this is no time to be cutting taxes. Even without that hazard, there are several complicating factors: Any tax cut needs to be large enough that people will notice it and it will benefit the economy. But it must not be so large that it cuts into future education funding prospects (which would get the education community all riled up). And it shouldn’t soak up so much revenue that it unduly complicates future tax reform efforts. And there needs to be enough money left over to bolster rainy day funds.
Other than that, cutting taxes is simple.
It’s important to remember that Utah overall taxes, in real terms, are lower than any time in many years, and are lower than in most states in the country. Cutting taxes won’t be as important to Utah’s future as providing outstanding education and investing in infrastructure to prepare for rapid growth.
How are coronavirus fears impacting the session?
Pignanelli: Cautious policymakers are incorporating how the sickness will impact the economy, especially the stock market. This is driving discussions as to future tax revenues and general economic considerations.
But the truly interesting conversations are happening in Capitol corridors as to whether the legislative session will end before any drastic measures are taken to prevent infection. Will legislators, staff and lobbyists be required to conduct business at a minimum of 6 feet from each other? How soon will face masks and tubs of hand gel become a mandatory accessory to parliamentary interactions?
Webb: Coronavirus right now is a bigger economic threat than a health threat. We’ve already seen that with the stock market plunge. In an interdependent national and world economy, Utah’s tax revenue won’t be immune from a global downturn. That’s why lawmakers should postpone cutting taxes and boost rainy day funds until we better know the full impact.
Republican LaVarr Webb is a political consultant and lobbyist. Email: lwebb@exoro.com. Democrat Frank Pignanelli is a Salt Lake attorney, lobbyist and political adviser. Email: frankp@xmission.com.