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Will there be a referendum on Utah’s tax reform?

The Senate convenes to consider a tax reform bill during a special legislative session at the Capitol in Salt Lake City on Thursday, Dec. 12, 2019.
The Senate convenes to consider a tax reform bill during a special legislative session at the Capitol in Salt Lake City on Thursday, Dec. 12, 2019.
Spenser Heaps, Deseret News

SALT LAKE CITY — Some opponents of the tax reform plan just passed in a special session of the Utah Legislature backed away Friday from launching a citizens’ referendum to repeal the massive changes that lower income taxes while raising sales taxes on food, gas and some services.

Both the Alliance for a Better Utah and the Utah Education Association said they’d decided not to pursue a referendum. So did activist Janalee Tobias, who has dressed as a Dr. Seuss character from “The Grinch Who Stole Christmas” to protest tax reform.

But Brett Hastings, a founder and director of Utah Legislative Watch, said not to count out a referendum to undo the tax reform legislation passed by lawmakers after hours of debate Thursday night that is expected to be signed next week by Gov. Gary Herbert.

“I will tell you that it’s being considered and people are well aware of the five-day turnaround that would be required” to begin the process to repeal legislation, Hastings said. He said he is in talks with several organizations that he declined to name about working together.

“I could foresee, potentially, a group effort,” he said.

Individuals calling for a referendum and offering to help gather the 116,000 voter signatures from around the state necessary to get a referendum on the November 2020 ballot are already contacting Utah Legislative Watch, Hastings said. “I think Utah citizens are pretty upset.”

Chase Thomas, executive director of the Alliance for a Better Utah, wasn’t ruling out getting involved in a referendum drive led by another organization. He joined Hastings and others at a recent news conference to oppose tax reform.

“I know there are still plenty of groups that are not only reaching out to us after last night but even before the session were talking about the possibility,” Thomas said. “We’ve come to the conclusion that we can’t head that effort. ... So if somebody else were to head it, we would definitely consider it.”

UEA President Heidi Matthews said the teachers group is not supporting a referendum

“Right now, we are really working to just mobilize our people, bringing together an education-supporting coalition to ensure that in the general session, public education is going to have growing investments,” Matthews said. “We’re skeptical based on our history, but we’re mobilizing to make sure these promises are kept.”

She said the focus is on “looking to the future and holding our legislators’ feet to the fire on education.”

Lawmakers did not deal with the key education pieces of tax reform in the special session — removing the earmark in the Utah Constitution on income taxes for education and coming up with alternative funding resources, likely including making it easier for local school districts to raise property taxes.

Those issues are expected to be brought up in the 2020 Legislature that begins meeting in late January.

UEA spearheaded a successful referendum to repeal a school voucher law in 2007. The current referendum process requires a petition to be submitted to the lieutenant governor’s office for approval within five days after the end of the legislative session, and the necessary signatures to be turned in within 40 days.

With the holiday season underway, Thomas said those requirements would be tough to meet.

Tobias suggested in a text that lawmakers intentionally chose this time of year for a special session to make it harder for anyone considering a referendum.

“There’s lots of talk, but the reality is that the Grinches on Capitol Hill have purposely passed (the) ‘fleecing the serfs’ bill during Christmas season, right when we’re trying to have peace on Earth. So we may very well be Scrooged ... just like we are every time the Legislature meets,” Tobias wrote.

State Elections Director Justin Lee said his office has received a few calls about the referendum process but it wasn’t clear how serious they were about proceeding.

Senate President Stuart Adams, R-Layton, said he wouldn’t be surprised if no one advances a referendum.

“When people think it through and see a $160 million ongoing tax cut and an $80 million one-time tax cut, trying to get those families that have dependents some revenue, I think they’ll understand that this is actually a positive thing for the families of Utah,” Adams said.

He pointed out that the Legislature’s Executive Appropriations Committee took the unusual step Friday of budgeting for student enrollment growth in public schools now rather than waiting until the 2020 session, setting aside nearly $33.7 million.

“We haven’t done that before, before the session. Our commitment to education is as strong as it ever has been,” Adams said, adding that tax reform will have support “If people see what we’re doing to try to help Utah families, to try to fund education, to try to fund the other needs of the state.”

House Speaker Brad Wilson, R-Kaysville, said he doesn’t expect to see a referendum effort.

“I have a hard time believing citizens are going to try to undo a $240 million tax cut. So we feel like we’ve done the right thing, fixed our structural balance and taken care of folks,” Wilson said shortly after Thursday night’s special session.

The bill is vulnerable to being repealed through the referendum process because it failed to pass with a two-thirds majority in the House and Senate despite Republicans holding a supermajority in both chambers. Democrats all voted against tax reform.

House Minority Leader Brian King, D-Salt Lake City, who said he’d “certainly welcome efforts” to repeal tax reform through a referendum, said the Republican opposition shows “people with Rs behind their names recognize that this is not very well supported, that this is unpopular.”

Thursday’s vote also means the bill won’t take effect for 60 days after it’s signed by the governor.

That delay won’t affect what the bill does, Adams and Wilson said. The reduction in the state income tax rate from 4.95% to 4.66% will still be in effect for all of the 2020 tax year, while the sales tax increases, including raising the state sales tax on food from 1.75% to the full 4.85% rate and imposing sales tax on gas, take effect April 1.

Some $60 million in checks will go out in February or March to Utahns earning up to around $70,000 who claimed dependents on their 2018 returns to rebate some of the extra state income taxes they paid because of the impact of changes to personal exemptions made to federal tax law under President Donald Trump.

Another $12 million will be used to provide what’s being called a “pre-bate” of the new grocery tax credit intended to offset the additional sales tax on food to Utahns making below the federal poverty level, likely in July. Other Utahns will be able to claim the up to $125 per person credit when they file their state income taxes in April 2021.