ST. GEORGE — As Utah’s Tax and Restructuring and Equalization Task Force wraps up its eight-stop listening tour in Utah County, members of the committee are gearing up to conquer the second tier of the proposed six-step tax reform process.
Washington County representatives Lowry Snow, R-District 74, and Walt Brooks, R-District 75, said they are thankful that the state took the time to consider all options and that members of the task force are not rushing into anything without due diligence.
“Every bill needs the same amount of sunlight in order to give visibility to the public,” Brooks said.
According to Brooks, it’s becoming increasingly important to allow the public to have ample time to read and understand these proposals. He said members of the task force need to pay special attention to the effects of the tax changes and address any possible unintended consequences.
Mayor Jon Pike expressed his gratitude at the task force’s open house in St. George, adding he is thankful that the task force included Washington County as one of its eight town halls stops. However, the mayor said it is “unfortunate that, frankly, once again, we’re not represented” on the task force itself.
Sen. Karen Mayne, D-West Valley City, said the listening tour has allowed members of the task force to hear concerns from residents around Utah and has helped them to understand that the different regions have their own needs.
“A one size fits all policy is not going to work,” one resident said during the task force’s stop in Moab.
Each area has its own economic needs and struggles, said Crystal Young-Otterstrom, Utah Cultural Alliance executive director, explaining that the problem with broad changes – like the ones introduced in the previous tax bill – is that they will affect each community differently.
Statewide trends might show an overall positive change, but communities that are more rooted in traditional transactions might see a decrease in revenue generated from sales tax, while a neighboring community with more services-based businesses might see an increase.
Throughout each of the stops, Mayne said the two most common topics were taxing services and education.
Revenues collected from income taxes are reserved for education, creating a revenue silo that would prohibit income tax funds from being allocated to anything outside of education.
Krista Palmer, executive director of the Utah Tax Reform Coalition, said she is not hopeful that legislators will move to amend the state constitution because everyone is afraid to go “head-to-head” with education.
“They all say publicly that Utah ought to have that constitutional silo, but none of them want to take it on,” she said.
State Rep. Travis Seegmiller, R-St. George, asserted that the highest priority of the 2020 legislative session should be reducing government spending before assessing how to lower the overall tax burden. If new taxes are required in the solution, other taxes should be decreased to offset the additional cost to residents and businesses.
Snow said the task force should be careful when imposing and cutting taxes, as it could potentially harm different areas of the state. He said in Southern Utah, for example, sales tax revenue from visitors helps fund transportation and road improvement.
After Tuesday’s event, members of the task force will take the questions and concerns of their constituents to meetings that will “verify challenge and need” in order to create priorities and begin developing the tax structure, Mayne said. Specific meeting dates have yet to be established.
Despite the unscheduled dates and undeveloped agendas, Mayne said the task force is on track to meet the final report deadline in September. If the task force is unable to meet the deadline for any reason, however, Mayne said members of the board are prepared to act quickly.
“We knew what the journey was, and we are prepared to do what we need to do to meet those guidelines and deadlines,” she said.
The task force was promptly created after the failure of the short-lived H.B. 441, which proposed taxing economic services in order to expand Utah’s sales tax base. Tax reform has become a hot-button issue due to what Palmer said is a “fear-based event” — the decline of the sales tax base.
Task force co-chair state Sen. Lyle Hillyard, R-District 25, asserted the tax base can only support Utah’s growing population for the next couple of years before the state is unable to fund the increased demand for public services, such as public safety, health and human services, public employees and clean air.
Utah is seeing a period of economic growth and prosperity, and Hillyard argues that this is the perfect time to address the growing need for tax restructuring. Due to the state’s relative financial security, he says the task force has the flexibility to adapt to statewide trends and changes.
The task force’s listening tour is a great step in the right direction, Palmer said; however, now it is time to slow down, put “everything on the table” and assess whether the state has a revenue problem, a spending problem or a structural problem.
Mayne said that is exactly what the task force plans to do next.
“I can assure you, all the legislators are open to everything,” she said. “There’s not one legislator that I know on that committee that has their mind made up about where to go.”
The task force tour concludes this evening with its final meeting beginning in the Utah Valley University Sorensen Center Grand Ballroom at 7 p.m. The final report is due before a special legislative session can be held, which is projected for some time in late fall or early winter.
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