On tax reform, Harmons fought the law and Harmons won

(Rick Egan | The Salt Lake Tribune) Harmons chairman, Bob Harmon, talks about his company's involvement with the tax referendum campaign, Wednesday, Jan. 22, 2020.

The Harmons grocery chain generally stays out of politics, company Chairman Bob Harmon says, not wanting to alienate any existing or potential customer.

“It’s very difficult, because there will always be an opposing side,” Harmon said. “I can feel how I feel and I can vote how I vote, and we feel that way for everyone who shops with us.”

But an exception to Harmons’ neutrality rule played out earlier this month, when the Utah-based company inserted itself into the divisive issue of tax reform, opposing a bill approved by lawmakers and Gov. Gary Herbert in December and making its 19 store locations available for signature gathering in support of a referendum campaign.

Harmon said his board objected to the bill’s “astronomical” increase to the sales tax on groceries, believing that food should not be taxed at all. And the company determined to oppose the tax changes because it was the right thing to do, Harmon said, and because the bill’s broad taxes would affect everyone in the state.

The grocery executive sat down for an interview with The Salt Lake Tribune on Jan. 22 after a referendum organizer said the effort had gathered enough signatures to make it on the ballot and one day before the governor and legislative leaders announced that, in deference to widespread public opposition, they would repeal their tax reform measure.

“We are in the food business,” Harmon said, while sitting in the cafe level of the downtown City Creek Harmons. “That’s the real connection point. We are serving people who are struggling, and we actually have associates that we know are living paycheck to paycheck.”

Harmons’ entrance into the taxation fight appears to have been decisive, adding energy and a multicounty footprint to the referendum campaign. Conventional wisdom initially suggested the volunteer-based petition drive was doomed to fail, but after Harmons catalyzed momentum, the referendum campaign turned in more than 150,000 signatures, a number that still requires verification by the state’s county clerks.

“Harmons was huge,” said Fred Cox, a Republican former lawmaker who led the referendum effort. “We were hoping that somebody like Harmons would come on board.”

Cox said the grocery chain helped the campaign in two major ways. First, he said, it gave the petitioners a boost in credibility and, second, it provided consistent and reliable locations for tax reform opponents to add their signatures to the referendum.

He said it was particularly helpful in Utah’s larger, urban counties, where the campaign required a large volume of signatures to comply with a requirement in law that referendums achieve proportional support throughout the state.

“People wanted to sign but didn’t know where to go to sign,” Cox said. “All of a sudden, they could just go to a Harmons.”

Cox said the campaign could have succeeded without Harmons. But he acknowledged it would have meant more work to collect significantly fewer signatures, and would have lessened the apparent weight of the public pushback against tax reform.

“We would have missed tens of thousands of people,” Cox said.

Harmon said the company had been asked “several times” in the past to join grassroots ballot drives but had declined. And while he was motivated in this instance by the proposed increase on food taxes, he said there’s an underlying feeling among Utahns that residents have been shut out of the political process.

He visited a number of Harmons stores during the petition drive, and said he was surprised to see customers who signed the petition and subsequently offered to stay and assist the campaign volunteers.

“People are really feeling that their voice isn’t being heard and with this they can,” Harmon said. “I think that connected probably as deeply as anything.”

He said there is a risk — both commercial and political — to getting involved in a controversial issue. But he added that the company faces risks every day by operating in the free market and competing for customers with rival chains.

But jumping into the tax reform fight, including taking out full-page newspaper ads, was, Harmon said “a no-brainer.”

“This added food tax just seemed to us extraordinarily high. In fact, we don’t believe there ought to be a tax on food,” he said. “... Food is just an essential part of all of our lives.”

The response was “outstanding," Harmon said. “They came out in volumes, thousands of them. So this was something that was right."

“It blew me away.”

After Harmons announced its opposition to the tax bill, Herbert issued a critical statement urging the chain’s executives to “rethink their ill-advised decision.” He said that if they had taken the time to meet with him or legislative leaders, they would understand the need for reform and the soundness of the Legislature’s proposal.

“As a corporate citizen in the state, they have a right to engage in the political process,” Herbert said at the time. “But they also have the responsibility to do so in a way that elevates the public’s discourse and is based on facts and not emotion.”

Harmon declined to respond to the governor’s criticism but said he applauds the work done by the state’s leaders to represent the public on important issues.

“I just think they need to lean into it," Harmon said. "They need to do some work up there and have further discussions and a different discussion about how we take care of services, and I applaud that work.”

With the signature verification ongoing, it is not yet known what will happen if the referendum qualifies for the ballot and the underlying bill is repealed by lawmakers. Justin Lee, the state elections director, said the law does not specify how to proceed in such a circumstance.

“We’re asking the Legislature to provide clarity on that when they repeal the bill,” he said.

Harmon said even if the referendum hadn’t qualified for the ballot when the official signature verification is completed, it wouldn’t matter.

The overwhelming grassroots response "already made it worth it. It’s already made a statement. I think it’s already reverberating through those who felt so strongly that it was going to be OK to get this done the way that they did. People have already spoken.”