Utah’s Legislature is moving forward on tax reform without the trust or support of the public, said Salt Lake County Councilwoman and gubernatorial candidate Aimee Winder Newton.
She said there are elements of the reform plan that are worthy of consideration during next year’s general session. But passing the bill this Thursday in a special session would be “premature," she said, and including an increase in the sales tax on food is not good for the state’s residents.
“I think we’ve got that wrong,” Winder Newton said. “And I think down the road we’ll look back and recognize that wasn’t a good policy for our low- and middle-income families.”
Winder Newton’s concerns, in general, were shared by the other Republican candidates running for Utah governor next year. In interviews or public comments on the topic of tax reform, the declared GOP candidates urged lawmakers to pump the brakes on reform and expressed reservations about levying higher taxes on grocery sales.
“I don’t like that it’s regressive,” businessman Jeff Burningham said of the proposed grocery tax hike. “It hurts the most needy among us.”
And in a prepared statement, Utah Lt. Gov. Spencer Cox said Tuesday that he disagrees with Gov. Gary Herbert’s decision to call a special session to vote on tax reform. He said there were “valid concerns” with the bill, including the food tax.
“Admittedly this bill is a significant improvement over previous iterations,” Cox said. “However, I still believe that we can do better.”
Under the proposed bill, the higher tax on food sales would be offset by a new grocery tax credit and an earned income tax credit. But anti-poverty advocates have criticized the approach, warning that an annual rebate does little to mitigate the recurring financial pressures of higher grocery costs.
The reform plan also includes a significant increase in the per-child dependent exemption and a cut to the income tax rate, which combine to an overall statewide tax cut of about $160 million. But those cuts come at the expense of Utah’s public education system, which is funded by income tax receipts, and legislative leaders have signaled that they intend to push a constitutional amendment that would further open up income tax revenue for non-education spending.
Burningham suggested lawmakers saw in food sales a bucket of revenue that could easily be poured into state coffers. And he compared the discussion around tax reform — which began during the 2019 legislative session and continued throughout the year — to a “sunk cost” that is motivating lawmakers to enact reform.
“I would push it to the normal [legislative] session and keep working on it,” he said.
Burningham was also skeptical of additional tax reforms, still in the negotiation stage, that could see local school district property taxes fill the void left by cuts to public education’s income tax funding.
That legislation — which may include automatic annual tax increases — will not be considered until the general session. But Burningham said understanding the specifics of those changes is critical for considering the current reform bill.
“I’m afraid that this very quickly, actually, becomes a tax increase in a couple of years,” he said.
In a Tuesday op-ed for the Deseret News, former U.S. Ambassador and Utah Gov. Jon Huntsman — who is again running for governor — wrote that taxing food is not a moral thing for government to do to its citizens.
“As Utahns we should be appalled that the first solution being dredged up is this low-hanging fruit that not only affects all Utahns but is unimaginative and harmful,” Huntsman wrote.
Utah’s grocery tax was reduced during Huntsman’s time as governor, as part of the last major tax reform package passed by the Utah Legislature. The Huntsman campaign did not respond to a request for comment.
A spokesman for former Utah House Speaker Greg Hughes, who is expected to announce his campaign for governor, also did not respond to a request for comment.
Leaders of the legislative task force have defended their drafting process by pointing to more than a dozen meetings on reform during the past year, including a statewide listening tour during the summer months that included town hall stops outside the Wasatch Front.
But the first indication of what would be included in their bill was not released by the task force co-chairman until mid-October, after those town halls had concluded.
Winder Newton said the timeline meant that Utahns who attended those meetings did not have a specific proposal to weigh in on, which limited the amount and quality of public debate.
“I think it felt to the public like you’re just going through a process because you have to," Winder Newton said, “or because your [public relations] firm told you you have to.”
She said more work could and should have been done to involve Utahns in the process, and to defend and explain the reasoning behind the reform proposal to the public.
“Utahns aren’t dumb,” Winder Newton said. “We have very smart people here who also should be weighing in on important public policy.”
Cox said the Legislature is to be commended for traveling the state and listening to residents on the topic of tax reform. But he said that work is different than allowing only four days to pitch a completed proposal to the public before adopting it in a special session.
“Even the best tax policy is doomed to fail if there is no public support,” he said.
Editor’s note: Jon Huntsman is the brother of Tribune Publisher Paul Huntsman.