Is tax overhaul too big an issue for a special session? Utah Eagle Forum’s president says yes, and some legislators might agree.

(Francisco Kjolseth | The Salt Lake Tribune) Utah Gov. Gary Herbert, Utah House Speaker Brad Wilson, R-Kaysville, and Sen. Dan Hemmert, R-Orem, from left, attend a tax reform discussion hosted by the Utah Eagle Forum at the Provo City Library on Wed. May 8, 2019.

Provo • State lawmakers who announced the disintegration of a major tax reform package earlier this year tempered the news by saying they hoped to return in a special session to wrap up unfinished business.

A couple months have passed since then, and Utah’s legislative leaders have only just appointed the task force charged with reimagining the state’s tax structure. But not everyone believes a special session should come on the heels of the panel’s final report.

On Wednesday, Utah Eagle Forum’s Gayle Ruzicka implored Gov. Gary Herbert and House Speaker Brad Wilson to hold off on tax reform until the next regular session.

“It is too big for a one-day special session,” Ruzicka told the state’s top executive during a Provo panel discussion sponsored by her organization.

Sen. Dan Hemmert, R-Orem, said some legislators he’s spoken with are leaning in the same direction, preferring to take up a weighty tax policy bill in a 45-day session.

Hemmert, Herbert, Wilson and Phil Dean, the state’s budget director and chief economist, also stressed that the task force will not be recycling the failed tax reform bill from earlier this year. The next tax overhaul proposal might incorporate elements of the legislation, which would have expanded the sales tax to a wide variety of service-oriented businesses. On the other hand, it might not carry any traces of the scrapped measure, HB441, Hemmert said.

“House Bill 441 is over, failed, done,” Hemmert said. “It is far from the starting place.”

Wilson reiterated that the objective is to deliver a net tax cut to Utah residents. At the opening of this year’s legislative session, the incoming House speaker said he wanted to slash taxes by a record $225 million while right-sizing the state’s various revenue streams. The Legislature’s efforts to do so with HB441 collapsed in the waning days of session, amid doom-and-gloom predictions about how the bill would affect the state’s business climate.

The forthcoming look at tax options will seek to set up the state for future financial stability without harming the economy, Herbert told the Eagle Forum crowd.

"We don't want to kill the goose that's laying the golden eggs," he said.

The task force formed earlier this week is made up of 10 legislators and four nonvoting members who will lend their expertise. The members are: Republican Sens. Lyle Hillyard, Curt Bramble and Kirk Cullimore; Democratic Sen. Karen Mayne; Republican Reps. Francis Gibson, Tim Quinn, Mike Schultz and Robert Spendlove; and Democratic Rep. Joel Briscoe.

The group is supposed to gather input from around the state and deliver recommendations to the Legislature toward the end of summer.

Reforms are necessary, Herbert explained, because the state’s sales tax is not keeping up with economic growth. Income tax revenues have seen robust expansion, but those funds are constitutionally earmarked for public schools and higher education, leaving sales taxes to support most everything else in government.

“We don’t need more money. What we’re looking for is flexibility in how to spend that money,” Hemmert said.

Wilson has called for swift action to correct the imbalance, saying that starting next year, the state will find itself $200 million to $300 million short of funding for “basic infrastructure and government services” if legislators do nothing.

Others have suggested that the situation isn’t so urgent. Ruzicka said in an interview following the two-hour event at the Provo City Library that lawmakers don’t have to get tax reform done in a special session or even in the next general session. The most important thing is doing it correctly, she said.

In thinking of solutions, some lawmakers have talked about loosening the constitutional restrictions that govern how income tax proceeds can be spent. Herbert said Wednesday that he’s generally in favor of eliminating earmarks but that changing the state’s Constitution would be a difficult task.

Other options up for discussion are levying a state property tax, getting rid of sales tax exemptions, creating a state lottery or adding a tourism tax.