SALT LAKE CITY (ABC4 News) – A special session of the Utah State Legislature is underway to address tax reform.
Governor Gary Herbert called for the special session earlier this week after the Utah State Legislature Tax Restructuring and Equalization Tax Force voted 6 to 3 to move forward with a proposal to the full legislature.
One component of the proposal would increase the food tax from 1.75 to 4.85 percent.
Lawmakers supporting the proposal said the plan will increase education funding and provide Utahns with an income tax reduction of $160 million.
Opponents of the proposal say it would negatively impact Utahns already struggling to make ends meet.
In a statement released Tuesday, Herbert said: “The bill proposed by the Tax Restructuring and Equalization Task Force changes how and where Utahns will pay taxes, but it does not increase their burden. In fact, 86 percent of Utahns will pay less taxes annually under the proposed bill than they do under the tax policies we have today. ”
READ THE FULL STATEMENT BELOW:
“I am tremendously grateful to the Utah Legislature for the time, attention, problem-solving, and effort that they have dedicated to restructuring our tax system over the last eleven months. I greatly respect President Stuart Adams, Speaker Brad Wilson, and the chambers that they lead for their willingness to tackle such a difficult issue. I’m also grateful to the many stakeholders who came to the table to offer their perspectives and expertise.
Stabilizing our tax system is necessary. The growth rate of our income tax, which funds education, increases every year. Meanwhile, the growth rate of our sales tax, which funds all other government services, increases much more slowly. In fact, sales tax revenues came in below projections this year. State economists have been watching this pattern since the days of Governor Olene Walker, and they know that we must adjust our tax structure so that both funds grow in proportion to our population, demand for services, and inflation. This work is vital for our continued economic success.
The decisions we make today will impact our children, grandchildren, and even great-grandchildren. I have weighed the policy implications of the current tax bill with great care, and I have concluded that it does take meaningful steps toward stabilizing our tax structure and bringing more equity and fairness to the system. I have also carefully weighed the issue of timing, and whether or not this ought to be accomplished in a special session.
After much consideration, I have concluded that this bill should be addressed in a special session so that legislators can carry out their duty of setting base budgets available for allocation during the upcoming general legislative session.
Passing this tax bill is the first in a series of steps necessary to create a structure that can support the Utah of the future.
Creating a stable system does not necessarily mean collecting more tax revenue.
It means collecting the same amount of taxes overall — or maybe even a lower amount — but from a wider segment of the economy, in a more fair and equitable manner.
That’s what this bill does.
The bill proposed by the Tax Restructuring and Equalization Task Force changes how and where Utahns will pay taxes, but it does not increase their burden. In fact, 86 percent of Utahns will pay less taxes annually under the proposed bill than they do under the tax policies we have today.
According to the Utah Foundation, the tax burden for individuals and families is the lowest it has been in 25 years, thanks to healthy economic conditions and increased efficiency in state government. For example, we have fewer state employees now than at any time since 2002. And we should keep it that way. If we build more stability into the taxes Utahns already pay, we will be able to create a system that can support generations of Utahns without increasing the tax burden.
A thoroughly balanced and stabilizing approach to reforming our tax code will require continued work. I’m grateful to the legislature for their courage in addressing this issue to date, and I strongly encourage them to continue their good work after the special session. The legislature needs to continue broadening the sales tax base and lowering the rate.
The income tax cut in no way jeopardizes education funding. With the support of the legislature, we have put a billion dollars of new ongoing money into public education over the last four years, for a total of two billion dollars of new ongoing money toward education in the last decade. I am dedicated to ensuring that the legislature continues to provide robust funding for our teachers and classrooms. This will be made clear in my upcoming budget recommendations.
Tax reform is never over. In a strong and ever-changing economy like Utah’s, we must constantly assess and modernize to be sure our system is stable, equitable, and fair. Utah’s economy is both strong and dynamic, and working together, we can ensure Utah remains the best place to live, to work, and to raise a family.”Governor Gary R. Herbert
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