This week, the Utah Legislature is to meet in a special session to debate an overhaul of our state’s tax structure. Touted as a large tax cut, a closer inspection of the proposed legislation reveals that the “savings” come from slashing our public education funding while reshuffling taxes in a way that requires working families to pay more up front when buying necessities in exchange for the promise of a little relief at the end of the year.
We’ve come far from the pledges made last spring to pass a “40-year” solution to our state’s tax structure imbalance. When the task force was assembled, the stated purpose of this journey was to broaden and stabilize the state’s tax base to address the long-term economic shift away from a goods-based to a service-based economy.
Quickly, the focus turned to removing the constitutional earmark dedicating income tax revenue to funding education. Education funding in Utah is the lowest in the nation. Utah decided in 1947 to dedicate income tax to our students. We have not honored that promise to our families.
According to recent statements, the goal now seems to be aimed at generating a large tax cut. If the intent has been to pass another tax cut, then legislative leaders should have simply and clearly proposed that last session, saving us the time and expense that has been exhausted on exploring how to best stabilize the state’s tax base. Of course, that would require acknowledging that every tax cut means less funding for the infrastructure that is needed to address the growth that we are so rightly proud of.
Despite the stated point of this entire process – to broaden the sales tax base by removing exemptions from extensive segments of our economy in order to ensure that our sales tax base is stable and sustainable – the current proposal includes hardly any taxed services at all.
And while most states have absolutely no state sales tax on food, and for good reason, this tax overhaul’s largest collection will rely on an increase to the rate placed on food. Food is necessary to live, and, for far too many Utahns, a few pennies are the difference between being able to afford an item or to go without. Taxing food might bring in a lot of revenue, but it something the vast majority of Utahns strongly oppose. A grocery tax credit paid at the end of the year is too little, too late for those who struggle with food insecurity.
We are now left with a proposal that cuts $160 million from public education while moving higher education back into the general fund, forcing social services and every other operation of the state to compete directly with higher ed. If higher ed loses that battle, then the shortfall will likely be passed on to college students in the form of tuition increases. If social services funding loses, then the most vulnerable Utahns will pay the price.
As lawmakers, we have a menu of potential areas to explore to achieve the originally stated goals of stabilizing our sales tax base. Past efforts at tax restructuring took years and required significant compromise. And, while there are some notable praiseworthy items, (earned income tax credit, Social Security tax credit, and removing the sales tax on menstrual products), the reality of this proposal is that it asks lower and middle-income Utahns to pay a larger share of their limited incomes to pay for an income tax cut that will primarily benefit wealthy Utahns.
We have left billions of dollars on the table in the name of numerous corporate tax exemptions, with absolutely no reporting from the beneficiaries as to whether those exemptions are generating a penny of benefit to the state. Rather than addressing that embarrassing fact, we are asking the people of this state to pay nearly triple the current state sales tax on something they cannot live without. That is simply unacceptable to us, and it should be to every Utahn.
Submitted by Utah state Sen. Karen Mayne, minority leader; Sen. Luz Escamilla, minority whip; Sen. Jani Iwamoto, assistant minority whip; Sen. Derek L. Kitchen, minority caucus manager; Sen. Gene Davis; Sen. Kathleen Riebe
