Utah real estate agents, among the most powerful lobbying blocs in the state, are putting their muscle behind a legislative push to reform taxes.
The political action committee for the Utah Association of Realtors has launched a website in favor of the tax overhaul effort and recently paid for a pro-reform mass mailing — designed to look like an $80 million check made out to “Utah’s working families.” The campaign materials call the plan a “pro-family solution that will also grow Utah’s economy” and defend the tax proposal against critics who say it will divert money away from education.
“We love the fact that the Legislature is proposing a tax cut, which will benefit our Realtors as well as other people in the state of Utah,” said Mike Ostermiller, a lobbyist and lawyer for the association. “Also, from a big-picture perspective, the idea of modernizing the tax system and creating revenue flexibility for the state — that’s not only good for the real estate industry, that’s good for the economy as a whole.”
The tax reform effort has a powerful ally in the real estate association, which is consistently among the biggest donors to state political campaigns.
A previous tax overhaul plan, which featured a proposed transfer tax on property sales, elicited a more lukewarm response this year from the state’s real estate community. Ostermiller noted that the lengthy and complicated bill changed several times during the legislative session and said the real estate association remained relatively neutral as it tried to digest the proposal.
Ultimately, the legislation collapsed under the weight of criticism from business owners, and lawmakers opted instead to create a task force that would start afresh. This panel earlier this month released a preliminary proposal – one that would involve an income tax rate reduction and several other forms of relief. It would also increase the sales tax on food and expand the sales tax to specific service-oriented transactions and gas purchases. The plan is estimated to yield an overall tax reduction of $80 million and deliver a $320 cut for a typical family of four making $60,000 a year.
A legislative fiscal analysis estimated that two-thirds of tax filers would see a tax reduction while a third would experience a tax increase.
A new version of the proposal is expected out Friday, ahead of a task force meeting next week.
When asked if the association is taking a risk by staking out a position before the bill language is settled, Ostermiller said the group is confident it approves of the task force’s direction.
“We like the idea of a tax cut for Utah families,” he said.
Ostermiller said the real estate association sent out the mailer this week to about 90,000 voters across the state. While he wasn’t sure how much the political committee would spend plugging tax reform, he said the total could top $100,000.
The flyer garnered some critical reviews from Democratic lawmakers on Twitter; Rep. Carol Spackman Moss of Holladay said it presented a “misleading explanation of tax reform,” while Rep. Marie Poulson of Cottonwood Heights called it “extremely poor form.”
During a phone interview, Moss said she found the mailer disconcerting for a number of reasons, among them that the fake check was signed by the “Utah State Legislature.” That detail suggests, Moss argued, that there is general support for the tax proposal — despite the fact that the bill language hasn’t been finalized.
Ostermiller disagrees that the flyer implies there is broad agreement among lawmakers and said it simply conveys the Realtors association’s support for a tax cut plan.
Some on Twitter also raised the possibility that the mailer violated the law by bearing an image of the state seal in its upper left corner. Justin Lee, the state’s elections director, said individuals who want to use the seal must first apply to his office for permission.
"In this case, we don't have any record that they asked to do that," Lee said Thursday.
Lee said the state is sending a letter to the association asking them to stop using the seal improperly. He noted that printing the symbol without permission can be considered a felony under state law and said his office has the discretion to refer violations to the Utah Attorney General’s Office.
Ostermiller dismissed criticism over the seal issue as a ploy by detractors.
“I think those comments are a red herring. I think they are a red herring argument from people who are against tax reform and against a tax cut,” he said.
However, Ostermiller said the association has received a cease and desist letter from the state and would stop affixing the state seal to its materials to avoid distracting from the group’s pro-tax reform message.
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