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Report: Utahns would rather raise taxes for specific benefits than cut services

(Trent Nelson | Tribune file photo) Lawmakers in the House Chamber vote to repeal the tax package they passed in December during a special session, at the state Capitol in Salt Lake City, Jan. 28, 2020.

A recent report from Utah Foundation shows 74% of Utahns favor raising taxes to pay for a specific state benefit such as public school funding, better roads and improved air quality.

The nonprofit research organization listed state taxes and spending as the Beehive State’s No. 2 priority for 2020. It said that in recent years, major expenses paid from Utah’s general fund — like health care — have increased faster than inflation, putting stress on state budgets.

“Broadly speaking, this leaves the state with four options: reduce services, increase taxes, change how the state budgets its revenues, or change what is taxed,” Utah Foundation wrote in the report brief.

“[State taxes and spending] may also get additional attention this year due to the coronavirus and the associated recession’s still unclear impact on Utah’s finances.”

The Utah Foundation poll was conducted by Y2 Analytics, a Salt Lake City-based market research group, and it gathered responses from 1,154 registered Utah voters in the first two weeks of March. It was conducted online and has a margin of error of plus or minus 2.88 percentage points.

Of the three benefits — public school funding, better roads and improved air quality — Utahns were most likely to support paying higher taxes for schools.

Rusty Cannon, vice president of the Utah Taxpayers Association, disagrees.

“On paying more taxes for education, which is typically income tax, we would be wholeheartedly against that idea,” Cannon said. “We believe our income tax rate needs to go lower.”

He said the Utah Taxpayers Association is “a little confused” by the report’s findings that many Utahns are willing to increase their taxes for a specific benefit.

Cannon noted that when a nonbinding question was put on the ballot about raising the gas tax to fund education in 2018, it was overwhelmingly defeated.

The report also indicated that Utah voters aren’t sold on a plan that would increase the sales tax on food to lower other taxes for an overall reduction. About 48% of voters disagreed with the idea compared to 36% who favored it.

This is consistent with the distaste Utahns demonstrated for the Legislature’s tax reform that would have increased the sales tax on food, cut income taxes, ended some sales tax exemptions and reduced Utahns’ total tax liability.

The unpopular proposal was repealed in January after the state elections office announced that a referendum campaign targeting the reforms had gathered enough signatures to qualify for the November ballot.

Hispanic and Latino respondents were most likely to disagree with the tax on food, with nearly half of respondents strongly disfavoring the idea, while only 3% strongly supported the idea.

If the state has to increase taxes, roughly 45% of voters said they preferred a sales tax increase, 31% of respondents chose the gasoline tax, 26% opted for the income tax and 19% pointed to the property tax.

Conservative Utahns were more likely to favor the sales tax than liberal voters, and younger people were more likely than older individuals to chose a property tax increase rather than increasing the gasoline and sales taxes.

The Utah Foundation report also found a majority of Utah voters don’t want to lower taxes if it means fewer or lower-quality services.

Some 58% said no, compared to 23% who agreed. Another 19% had no opinion or didn’t know.

The report notes that the Utah Legislature has been planning how to reduce expenditures to balance the budget, saying the effect this has on the state “could be felt for years to come.”