SALT LAKE CITY (ABC4 News) – A proposed sales tax increase on food brought dozens of frustrated advocates for Utah’s lower-income families to Capitol Hill.
In a rally Wednesday shortly before a Revenue and Taxation Committee meeting, opponents said the increase would hurt those who are already struggling to make ends meet.
On the income tax side, the proposed tax reform bill would reduce income tax from 4.95 to 4.56 percent, expand Utah dependent personal exemption, give a social security credit, and a grocery tax credit.
On the sales tax side, it would increase sales tax on food from 1.75 to 4.85 percent, repeal exemptions, apply sales tax to gas, services, motor vehicle rental, provide an exemption for feminine hygiene products, and give a discount to modified vendors.
“Our constitution requires us to spend certain types of money in certain ways. At the end of the day right now, we have probably a little too much of one type and not enough of another and we’re going to try to balance that out,” Speaker Brad Wilson told ABC4’s Glen Mills on the November 10th episode of Inside Utah Politics.
Some critics have said the bill is being rushed, but Speaker Wilson said legislators don’t have a lot of time left.
“The truth is we probably only have a year or two before we’re going to really start to have an ability to pay for basic government services including transportation. So we’ve got a pretty short time frame to fix it. The other reality is…we’ve spent almost a year studying including all summer, town halls all across the state. We’ve had probably a dozen hearings over even since the session ended in March,” he said.
In a press conference led by Utah Against Hunger and its partners, opponents said the proposed food tax increase would hurt families that are already struggling to make ends meet.
“Folks who are spending their hard-earned money on groceries are going to pay about $7 a week more on taxes. That doesn’t really sound like that much, but when you add it up over a month, that’s $28 that could go towards buying additional groceries,” said Gina Cornia, Executive Director of Utahns Against Hunger.
“These families are struggling month to month, check to check, and will be unfairly impacted by the proposed changes to the tax structure,” said Rev. Vinnetta Golphin-Wilkerson with Granger Christian Church. “We should not change the tax system so that those with less money are forced to pay more for groceries every month while their landlords and their employers pay less total tax each year.”
“Legislators must consider the devastating impacts such a proposal would have on earners who are struggling to make their rent or house payments, pay medical bills, afford a mode of transportation and provide opportunities for their children,” said Jean Hill with the Catholic Diocese of Salt Lake City. “They must also consider those who are days away from homelessness and still need to eat. The extra dollars and cents required to buy food matter deeply to someone who is barely hanging on.”
Lawmakers said the proposed tax reform bill would restore the sales tax on food to what it was before and provide a tax break for families in the lower-income bracket.
“We’re just talking about restoring the full sales tax on food back to about 4.8 percent. But at the same time, giving every Utahn below a certain income threshold a credit for every individual in their house. That’s really targeted at those at the lower income levels so that they don’t actually pay that sales tax on food,” said Speaker Wilson.
Rally participants criticized the tax credit, saying it would cause a number of Utahns under the poverty line to fall between the cracks.
“A once-a-year credit will not solve their week-to-week struggle to make ends meet,” said Hill.
“It’s the wrong way to do it because a lot of elderly households, a lot of disabled households who live on disability payments, they don’t file taxes. So how are we going to reach those folks?” said Cornia.
Senator Lyle Hillyard, co-chair of the Tax Restructuring and Equalization Task Force, issued this statement to ABC4 News in response to the rally:
“I appreciate Utahns voicing their concerns. The draft bill proposing to reinstate the full sales tax rate on food is coupled with a grocery sales tax credit, income tax reduction, credit for those receiving social security and an earned income tax credit for families affected by inter-generational poverty to help alleviate potential impacts.”
Advocates said they will present their petition and sign-on letter from more than two dozen organizations at the committee’s next meeting on Monday. Meanwhile, an updated version of the bill is slated for completion on Friday in preparation for that meeting.