SALT LAKE CITY — Saying they want to return money to those who “need it the most,” Utah legislative leaders announced Monday a nearly $100 million package of tax relief bills.
The three bills would provide help for families with children, veterans and senior citizens, but not all Utahns, as legislative leaders have said an across-the-board income tax rate cut is unlikely this year.
“Today we want to try to put money ... back into the hands of Utahns that need it the most, especially Utah’s families, veterans and seniors,” Senate President Stuart Adams, R-Layton, said at a news conference at the Capitol to announce the tax cut package.
“We know these groups are vital to our community, and we are dedicated to assist them.”
The bills are:
- Sen. Lincoln Fillmore’s SB153, which would set aside nearly $55 million in ongoing money to restore the dependent exemption that was lost in federal tax changes in 2017 and caused a tax increase on many Utah families. In 2018, the Utah Legislature brought back a portion of the exemption, and with SB153 is seeking to restore even more of it.
SB153 would reduce taxes for over 388,400 taxpayers by an average of $140 a year, according to the bill’s fiscal note.
- Sen. Wayne Harper’s SB11, which would use $23.8 million in ongoing money to eliminate income taxes for Utahns on military retirement pay. A previous version of the bill would have also cut Social Security taxes, but that part of the reform is being addressed in another bill.
Fiscal analysts estimate SB11 would reduce the tax burden of nearly 18,100 people by an average of $1,315 a year.
- Rep. Walt Brooks’ HB86, which would use about $18.3 million in ongoing money to eliminate income tax on some Social Security income, targeting Utah senior citizens living on fixed incomes. Fiscal analysts estimate it would reduce taxes for about 63,220 Utahns by an estimated $280 a year.
House Speaker Brad Wilson, R-Kaysville, also endorsed the plan.
“As elected officials it is absolutely our job to take and use tax dollars to the greatest benefit of Utahns,” Wilson said. “And sometimes, that actually means giving it back to Utahns.”
Anthony Neil, a father of three who with his wife, Megan, attended Monday’s news conference with legislative leaders, applauded the Legislature for “correcting a federal policy that has hurt families like ours.” With SB153, Neil said his family is expected to see his state income tax decrease by about $200.
“(This bill) will be a boost for families such as my own and goes to the show the Legislature understands the effort that goes into raising kids and the importance of strong families to our economy,” Neil said.
Mario Reeve, a retired senior master sergeant in the Utah Air National Guard, also attended Monday’s news conference to speak in favor of the proposal, specifically for the tax cut on retired military pay.
“Until this year, Utah was one of only a few states to fully tax military retirement income,” Reeve said, applauding Utah lawmakers “for recognizing the service of so many who have served and now call Utah home.”
“Reducing individual tax on military retirement pay is a great way to show our veterans that we value the many benefits they provide to our state,” he said. “Passage of this bill helps to make Utah a community of choice for our retired veterans and helps to attract and maintain this highly talented and dedicated workforce.”
Lou Carroll, 69, said he’s been retired now for six years, and seven years ago became a widower.
“That was quite a life change for me,” he said. “But I continue on.” After working for 45 years, Carroll said he was depending on his Social Security to retire.
“Obviously eliminating the state tax on Social Security would be a definite benefit to people in my situation,” Carroll said. “You go to a grocery store, they don’t care you have a fixed income. You go to buy gas, they don’t care if you have a fixed income.”
Adams at the beginning of this year’s legislative session said 2021 would be “the year of the tax cut.” Legislative leaders have been for weeks promising some sort of tax relief this year, with already $80 million set aside for that purpose.
“Our state faced incredible challenges in 2020, and we met adversity head-on. Utahns’ fortitude enabled us to emerge stronger, as individuals and as a state,” Adams said. “With these tax cuts, families, veterans and seniors will have financial relief. The Legislature is committed to helping all Utahns and will continue to work tirelessly to support our communities.”
Although it’s been floated as an idea, legislative leaders have said an income tax cut for all wage-earning Utahns isn’t likely, especially citing tight revenues for ongoing money.
State leaders released new revenue estimates Friday that show lawmakers have an extra $1.5 billion to spend this year. Legislative leaders said the extra revenue was thanks to Utah’s strong economic standing despite the pandemic, but they still warn there isn’t enough money to fund all requests, which have totaled nearly $2 billion for one-time projects and $400 million for ongoing proposals.
A new Deseret News/Hinckley Institute of Politics poll released Monday showed Utahns want an income tax cut for all wage earners only second behind spending more money on education.
Asked by a reporter why lawmakers arrived at this more targeted package rather than an income tax rate cut, Wilson said an income tax rate cut “absolutely” was part of the discussion, but legislators felt restoring the dependent exemption was a “really important step” this year. That, combined with military and Social Security tax cuts “would benefit some populations we really wanted to see help.”
But legislative leaders are leaving an income tax rate cut on the table for next year.
“We’d love to do a rate cut at some point,” Wilson said, while also pointing out the income tax rate was cut several years ago, “so keep that in mind.”
Adams said lawmakers have “done what we can this year but we look forward to potentially doing even more next year.”
“We’re not done.”