Alexander the Great once observed that the people of Asia had become slaves because they had not learned to pronounce the word “No.”
If Utahns don’t say “No,” and soon, we may become slaves to new categories of unnecessary taxes.
Despite a $1.2 billion surplus, and even though during the last legislative session people already said “No,” many are still angling for a new, massive, and complex tax on services. They call it “reform.”
These reformists argue new taxes will fix a supposed crisis: that income tax receipts are increasing more rapidly than sales tax receipts. Huh? Personal income usually grows (and should grow) faster than spending.
More puzzling is why we need “reforms” when the state will shortly receive all sales taxes due from internet and marketplace sellers — something not yet in full swing, but that will happen soon. When it does it could dramatically and upwardly change sales tax receipt data.
What’s the rush to make wholesale – and untested – changes to Utah’s tax law?
Reformists answer that question with a script: They say we must remedy income/sales tax diversion lines by new taxes on services — a new tax category! “Broaden the base,” they chant with religious fervor. They have charts and make talk about “balancing” and “three-legged stools.” They ignore that New Mexico, one of the few states with a broader tax base, has the same growing diversion.
These scripted explanations didn’t make sense during the legislative session and they don’t make sense now. But the reformists won’t give up. The Legislature has appointed a new Task Force. It’s touring the state. More scripts, charts, and stools, but no more clarity. What’s really going on here?
Reformists are using an invented crisis in a surplus year to end-run a constitutional provision. Utah’s Constitution prohibits spending income tax receipts for anything but education. That’s what all this is about.
Utah is the only state that constitutionally mandates all income tax receipts be spent on education. Why don’t we just fix that? Doesn’t that make more sense than entirely new categories of tax?
Amending the Constitution would allow legislators to adjust. Even if we all said to the Legislature, “Adjust!” the Legislature could not. Is that wise in 2019?
The Constitutional provision causing all this ruckus is nearly 90 years old. Do we think the depression-era Utahns knew better than us how we need to tax and budget in 2019? How the provision first got into our Constitution is largely a mystery —the reasons for amending it out now are clear: We are a growing state, our economic picture demands flex more than rusty legislative handcuffs locked nearly a century ago.
Unlocking those handcuffs will end the threat of legislators’ wandering into unmapped minefields of new taxes with an incomplete tax data map for a guide.
The process of amending the Constitution is not easy, but it’s already in the works with strong backing from cooler heads than are in the “reform” camp.
Reformists and other alarmists will resist. They have a reason, but not a good one: They don’t want to take on education.
But it is time to do this despite the fight it will require. In fact, education should put its ear to the ground and hear what is coming.
The Constitutional earmark never functioned as intended. Many educators know that. They know the earmark is often an excuse to limit education funding – not help it.
Listening hard, education might even be able to hear what the reformists really want. They want to cut income taxes, in which case education is guaranteed less money.
It’s time to work together with Education to eliminate the earmark. If we get this simple fix, budget line items for education will not likely suffer. Under reform, they certainly will.
Right now, Utah is doing well, and we don’t need excursions into a new, unjustified Utah taxes when there is a long-overdue, simple fix to cure our lack of needed budget flexibility.
Let’s work together, not only to say “no” to new tax categories, but also to get behind eliminating this budget earmark mandate which has been on the constitutional shelf long-past its expiration date.
Al Hartmann | The Salt Lake Tribune Republican governor candidate Jonathan Johnson holds a press conference Thursday June 23 at the Utah state capitol.
Jonathan Johnson is a Utah businessman and former GOP gubernatorial candidate.