Despite earlier setbacks and worry that it may make balancing yearly budgets tougher, the House advanced a proposed constitutional amendment Wednesday that would require saving a bit for the future each year by setting aside some of the state’s severance tax on oil and natural gas.
"This is a chance to save something for the future, and not just be focused on today," said Rep. Jim Nielson, R-Bountiful, sponsor of HJR6.
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It passed on a 54-19 vote, and was sent to the Senate. If it also passes by a two-thirds majority there, it would be sent to voters — where it would need a majority vote to be added to the state Constitution.
Nielson two weeks ago failed to require the same action through a mere statute, HB210. That bill was defeated on a close 36-39 vote. Nielson said that died, in part, because some lawmakers felt that a constitutional amendment was needed instead.
Nielson said some other western states have created huge trust funds by saving their severance taxes that generate millions of dollars each year from the interest for use in schools or other purposes. He said Utah has a relatively tiny trust fund because it uses most of its severance tax every year instead of saving it.
After a five-year phase-in period, the amendment would require putting into trust funds 25 percent of the first $50 million of annual severance tax; 50 percent of the next $50 million; and 75 percent of all revenue beyond that.
Rep. Joel Briscoe, D-Salt Lake City, worried it would take away flexibility of state leaders to deal with yearly budgets or unforeseen problems in the future.
House Minority Leader David Litvack, D-Salt Lake City, urged a study on the issue, saying too many questions are unanswered about "our flexibility and ability to deal with uncertainties" with future budgets.
But Rep. Chris Herrod, R-Orem, said, "Other states have done this for a long time. We are going to be at a competitive disadvantage" if Utah also does not take steps to create a big trust fund for the future.
Nielson said, "Are our needs today more important than future generations?"
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