Lawmakers from the Utah House and Senate are working feverishly behind the scenes to craft a consensus tax reduction package. However, details are scarce; it will likely be several weeks before it is ready for the public.
Legislative leaders have been almost giddy about cutting taxes since before the 2023 season began, especially since the state is sitting on more than $2 billion in extra revenue. Because of that extra cash, the top budgeting committee put aside $400 million in December to fund a tax cut package.
House Speaker Brad Wilson, R-Kaysville, played coy on Friday about what shape that tax cut bill might take.
“There will be a historic tax cut this year, but to what degree we cut is yet to be determined. Additional tax relief for those on Social Security is still part of the conversation, so we’ll keep working through that,” Wilson said.
Senate Majority Leader Evan Vickers, R-Cedar City, was also thin on details when asked about tax reduction negotiations.
“There’s a number of tools we’re looking at, and we’ll see where we land,” Vickers said.
Lawmakers are waiting for new, consensus revenue projections that they’ll use as a framework for the final budget. Those will be released shortly after President’s Day. Those projections have been much higher than expected in recent years, leading to the extra billions in the budget.
The federal government announced Friday that the U.S. economy added 517,000 jobs, dropping unemployment to 3.4%, the lowest level in over 50 years. Utah’s unemployment rate currently sits at 2.2%, the lowest in the nation.
Lawmakers have been handwringing about a possible economic downturn for some time, but the rosy outlook seemingly runs counter to that. Wilson was buoyed by the jobs report numbers but said it wouldn’t open the floodgates on spending.
“A lot of the reason we have the additional money right now is we’ve been really careful with spending the last few years. Our economy is still white hot, but we want to make sure we’re really thoughtful about how we do this,” Wilson said.
Because of Utah’s unique budgeting system, income tax revenue can only be put toward public and higher education and some social services for disabled residents. Any income tax cut would come at the expense of future revenue for those programs.
Another tax proposal floating around the halls of the Capitol is Rep. Judy Weeks-Rohner’s proposal to eliminate the state’s 1.75% sales tax on food. Her bill last year died without so much as a committee hearing. Wilson was noncommittal about whether that proposal might get more traction this year.
One pre-session proposal that seemingly won’t be included in the final package is a one-time tax rebate check to every Utah taxpayer that was part of Gov. Spencer Cox’s budget proposal. While they haven’t completely ruled the rebate out, Legislative leaders have expressed there’s not much enthusiasm for the idea among lawmakers.
