With tax reform dead, lawmakers are delaying budget talks amid disagreement between House, Senate leaders

The floor of the Utah House of Representatives is shown during the first day of the Utah legislative session Monday, Jan. 28, 2019, in Salt Lake City. (AP Photo/Rick Bowmer)

A day after pulling the plug on tax reform, legislative leaders on Friday canceled a crucial budget meeting aimed at finalizing much of the state’s spending plan for next year.

Legislative leaders had little to say about the delay, but advocates were left to worry whether or not they would get their requested appropriations.

“When we have agreement between the two chambers we will meet,” Rep. Val Peterson, an Orem Republican who sits on the Executive Appropriations Committee, said Friday.

Sen. Jerry Stevenson, a Layton Republican who is co-chairperson of the spending committee, said in a text that “major changes” could come out of ongoing talks, but would not comment beyond that. And there were unconfirmed reports Friday that lawmakers were looking at passing a scaled-back budget that could be adjusted later on in a special session.

Budget discussions took a turn Thursday with the collapse of the major tax overhaul plans that state leaders had placed at the top of their to-do list this session. In a quickly arranged news conference, Gov. Gary Herbert, Senate President Stuart Adams and House Speaker Brad Wilson, R-Kaysville, declared that they were still committed to tax reform — it would just take a little more time than they’d hoped.

After taking a few months to refine the proposal and build support among the business community, they plan to reconvene in a special session, possibly over the summer, to enact the tax reform.

But, for now, that leaves legislators to deal with the same budget problems that have been nagging at them for years. The state’s income tax revenues, dedicated to education funding, continue to grow at a rapid clip, while the sales tax revenues that support the rest of government are lagging behind. And Utah leaders are about to lose the budgetary flexibility they’ve long exercised by shifting higher education costs from the sales tax fund into the income tax fund.

Lawmakers were hoping by expanding the sales tax this session, they could right the ship. But now, they’re back to budgeting under a tax system they’ve said is broken.

“There’s fairly significant concerns as to the effect of not having tax reform in place,” Adams, R-Layton, said Friday.

Lawmakers involved in designing the budget were expecting to work over the weekend on their plan of action, Greg Hartley, chief of staff for the Utah House said.

House Minority Leader Brian King, D-Salt Lake City, said the cancellation of a key Executive Appropriations Committee meeting Friday is an indication that lawmakers are on different pages.

“Those meetings were canceled, and it doesn’t take a genius to figure out just from an outside perspective that there is not agreement between the House and the Senate leadership teams,” King said.

Meanwhile, some interest groups were reading the worst into the meeting postponement.

Beth Noyce, executive director of the Utah Hospice and Palliative Care Organization and Utah Association for Home Care, said she was concerned about the fate of a proposed funding increase for home health care Medicaid rates. She said she worried that amid all the budgetary upset, this funding might not make it into the final spending plan.

Editor’s Note: Beth Noyce is the spouse of a Salt Lake Tribune editor.

Reporter Benjamin Wood contributed to this report.