Governor calls special session to decide on tax reform
SALT LAKE CITY (KUTV) — A special legislative session will be held to decide on the restructuring of Utah's tax code, Governor Gary Herbert's chief of staff confirmed to 2News. The session will take place on Thursday.
Monday marked the end of nine months of public comment with regard to the proposed updates to Utah's tax code. Discussions have been ongoing, and proposed legislation ever-evolving, since legislative leaders first decided to pull the proposed reform last session.
State lawmakers will vote on a $160 million tax cut for Utahns, but the lone Republican on the task force to vote against the plan said it doesn’t fix the state’s budget problem.
Rep. Tim Quinn of Heber City tried to build consensus earlier this year on taxing services and reducing the overall tax rate, but lawmakers ultimately shelved the plan and have been working all year on alternative versions.
The latest plan reduces the income tax rate to 4.66% while taxing some new services like streaming services, ridesharing and newspaper subscriptions. The cost of gas and groceries will also go up, bringing in an estimated $420 million of additional revenue.
“This is my biggest gripe with it,” Quinn said. “I don’t think it does anything to reform taxes, to reflect the tax policy that is consistent with a changing economy.”
Quinn, who opposes the grocery tax, said people are buying less gas and groceries these days, so taxing them more heavily does not shore up the state budget.
Nearly every Utahn will receive a tax break, mostly because of the income tax cut, according to an analysis by the free-market think tank Libertas Institute, which is neutral on the bill.
“Winners in this tax bill include all taxpayers in general, but specifically taxpayers with children,” said Michael Melendez, the nonprofit’s policy director.
“The only slight loser we see with this tax reform bill is single people without dependents,” he added.
Some people will also get to keep more of their Social Security checks.
Speaker of the House Brad Wilson said he’s happy with the bill and there’s broad support. Wilson told 2News:
We’re stabilizing our tax system just a little bit, and that’s important. Income tax is really volatile.
“The largest winners in this state tax reform bill are working, middle-class families,” he said. “A family of three or four children will see a $600+ tax cut if they’re making about $70,000 a year.”
Wilson said the special session is needed now so Utahns can see the savings in their paychecks soon and so that lawmakers know the budget dynamics before their general session next month.
Gov. Gary Herbert, as of Tuesday afternoon, had not yet officially called for the session, which may happen Thursday.
“I think you heard the chair say last night this a five-to-seven year Band-Aid,” Quinn said. “If we went to all this trouble, let’s fix it now. Let’s not push it off to a future legislature. Let’s not kick the can down the road.”
A list of additional services that would be taxed under this plan is available through the Libertas Institute.
