Utah’s tax policy should reflect our values as Utahns. But House Democrats see where the current tax reform conversation is going and we have serious concerns.
We held seven of our own town halls this summer to hear Utahns’ thoughts on tax reform. Before we go further with any generational overhaul of our state’s tax code, let’s be clear about our shared values gleaned from conversations with constituents across the state.
First, avoid unfairly burdening families and retirees. When legislators talk about raising the tax on grocery food, they’re talking about adding another burden for many working Utahns. The $250 million to be gained from raising the grocery food sales tax rate from 3% to 4.85% will disproportionately saddle families who already spend higher percentages of their monthly income on food than wealthier households.
Supporters of this idea claim economically-challenged people already receive benefits like WIC or SNAP (food stamps). But 30% of all eligible individuals don’t participate in SNAP, and most SNAP households also spend their own money to buy food, meaning food insecurity will grow if we hike this tax. There is a reason 32 states don’t tax people at all for unprepared grocery store food. It runs counter to basic values of fairness.
Also, the state should stop taxing Social Security. More than half of all senior households also pay federal taxes on Social Security benefits, and those monthly checks keep some out of poverty. Most other states (37) go easier on middle-income retirees trying to make ends meet. Yes, Utah gives older Baby Boomers a retirement credit of up to $450, but it’s a drop in the bucket. Utah’s retired population deserves better.
Second, invest in education. Don’t just “hold education harmless.” Some argue we should remove the state constitutional requirement that our income taxes fund public education to give us “flexibility.” Now more than ever, our K-12 public education system needs a strategic, dedicated funding mechanism.
No matter how some try to spin it, Utah’s lowest national ranking for per pupil spending shortchanges our kids. We don’t need more studies to know that overcrowded classrooms and low teacher pay fundamentally disadvantages Utah children. Furthermore, data shows that underprivileged, disabled and minority students are particularly vulnerable under this inadequate funding mentality.
Since the mid-90s, the Legislature and Gov. Jon Huntsman’s 2007 “flat tax” have gradually slashed $350 million of annual income tax revenue from schools. For too long, legislators impulsively cut taxes in good times with little regard for how that limits our ability to invest.
A better-funded education system will give us the greatest likelihood of improving our quality of life and ensuring strong economic development. It’s time to show we truly value our children and their future, and fund education more, not less.
Third, scrutinize corporate giveaways. We should reassess how we dole out tax exemptions and demand transparency. Utah gives hundreds of millions of dollars in tax breaks to various business activities and industries that don’t have to report. Even legislators aren’t allowed to know which corporations are keeping millions of dollars in sales taxes. It’s reasonable to question whether these exemptions really help.
Businesses shouldn’t get reduced taxes until they’re more transparent with how those tax breaks benefit the economy and everyday Utahns. We know Utahns value accountability with their tax dollars.
Oil and gas producers are pressing the state to cut the 7.5 percent sales tax for equipment and materials. But they already contribute much less in taxes than in other neighboring Western states, and the tax rate Utah levies on coal producers is comparatively next to nothing. With fossil fuels driving air pollution locally and the climate crisis globally, protecting public health and our kids’ future should be a primary principle.
Fourth, keep Utah competitive. We agree Utah needs a tax system that reflects the changing economy and enhances our economic competitiveness. As the population grows, so too will demand for health care and social services, infrastructure, education, housing, a healthy environment and good jobs that accommodate working parents.
Currently, we have the lowest rate of income inequality in the nation because our predecessors invested in us. We must build our tax policies around these universally shared values, or we will lose the quality of life we now enjoy.
Utahns deserve a well-vetted public process, not a PR campaign. As a state we have many practical avenues we could take to reform our tax system in a manner that avoids unfairly targeting families and retirees, while improving education funding and making sure that businesses contribute to keep Utah the great state it is.
Signed, members of the Utah House Democratic Caucus, Rep. Patrice Arent, Rep. Joel Briscoe, Rep. Jennifer Dailey-Provost, Rep. Susan Duckworth, Rep. Suzanne Harrison, Rep. Sandra Hollins, Rep. Karen Kwan, Rep. Brian King, Rep. Stephanie Pitcher, Rep. Marie Poulson, Rep. Angela Romero, Rep. Carol Spackman Moss, Rep. LaWanna “Lou” Shurtliff, Rep. Andrew Stoddard, Rep. Elizabeth Weight and Rep. Mark Wheatley.