Special session of the Utah Legislature called by Gov. Herbert to vote on tax reform

(Rick Bowmer | AP file photo) Utah Gov. Gary Herbert speaks during the Utah Taxpayers Association 2019 legislative outlook conference Monday, Jan., 7, 2019, in Salt Lake City.

Utah Gov. Gary Herbert formally called a special session of the Legislature for Thursday to consider a massive, and controversial, tax reform plan.

Herbert issued the call a day after a divided legislative panel voted to advance the tax cut.

In a prepared statement, Herbert said he was “tremendously grateful” to the Legislature for their work on proposals to restructure the state’s tax code over the past year.

“The decisions we make today will impact our children, grandchildren, and even great-grandchildren,” Herbert said. “I have weighed the policy implications of the current tax bill with great care, and I have concluded that it does take meaningful steps toward stabilizing our tax structure and bringing more equity and fairness to the system.”

Herbert also said the reform proposal would be the “first in a series of steps” toward creating a tax structure that can support Utah into the future.

“Tax reform is never over,” he said. “In a strong and ever-changing economy like Utah’s, we must constantly assess and modernize to be sure our system is stable, equitable, and fair.”

Herbert’s lieutenant governor, Spencer Cox, who is also running next year to succeed Herbert as governor, issued a statement saying he disagreed with the decision to call the Legislature into special session.

“We have had very candid discussions regarding my concerns over the past month,” Cox said. “Admittedly this bill is a significant improvement over previous iterations. However, I still believe that we can do better.”

Senate President Stuart Adams and House Speaker Brad Wilson issued a joint statement Tuesday morning saying a special session is “the ideal setting to consider a bill of such significant complexity."

"If passed, the proposal will allow us to implement a $160 million tax cut that Utahns will see in their paychecks in 2020,” the two Republican legislative leaders wrote.

The plan would hike the sales tax on food and apply new taxes to certain service transactions and motor fuel purchases. It would also make an array of income tax cuts. Combined, most people would see a tax reduction.

For a family of four, the average annual cut would total $300 if their income was $25,000; $525 if they earned $60,000; and $120 if they made $85,000, legislative estimates show.

It’s a plan that has drawn opposition from anti-poverty advocates, educators and certain corners of the business community while earning rave reviews from select anti-tax groups and industry representatives.

One Republican on the legislative panel voted against the proposal Monday — Rep. Tim Quinn, who sided with the committee’s two Democrats to oppose it. He said it doesn’t make significant strides toward solving core budget problems that create the need for tax reform, and will need updates later.

Sen. Lyle Hillyard, who is a co-chairman of the task force, acknowledged that the proposal isn’t perfect, but he said it will buy the state time as it seeks to tackle its budgetary challenges.

Monday’s meeting capped off months of public hearings and meetings held by the legislative task force assigned to update Utah’s tax code, balance the state’s revenue streams and ease the overall tax burden.

Some have doubted the need for a special session just weeks before state lawmakers are already scheduled to convene at Capitol Hill for their annual 45 days of legislating. That included gubernatorial candidates like Aimee Winder Newton, a Salt Lake County council member.

Herbert sided with Hillyard and other legislative Republicans by saying that voting on the tax package in a special session will allow legislators to focus on other important matters during the regular session.

In addition to tax reform, Herbert’s call for a special session also includes discussion of funding for behavioral health programs.