Candidates tear into Utah tax code

The U.S. presidential race seems to be disintegrating into name calling, but Utah's gubernatorial race is polite — so polite that Democrat Scott Matheson Jr. and Republican Jon Huntsman Jr. applauded each other Friday during their first of eight formal debates.

The Utah League of Cities and Towns debate, also broadcast live on KCPW radio, had taxes as its theme. And there were few surprises during the discussion.

One difference, perhaps.

Matheson said that state government, in trying to balance out sales tax across Utah, may want to remove some sales-tax exemptions while allowing local governments to raise taxes via citizen referendums.

Huntsman, meanwhile, said Utah now levies 54 different taxes, and the whole code should be restudied with an eye to having only three or four "stable" tax sources — such as sales, property and income.

No one advocated tax hikes. But hints were made about some significant tax changes should the 2005 Legislature agree with the ultimate winner.

Both men said tax-reform discussions should include whether property-tax increases, caused by real estate inflation, should be exempt from local Truth-in-Taxation hearings.

The candidates even talked around raising the state's per-gallon gasoline tax, not increased since 1997, which would help fund billions of dollars in critical road construction.

Huntsman didn't mention one of his campaign planks — cutting the sales tax from unprepared food. Reducing that tax would be a sore spot with local government officials in the audience as more and more cities and towns rely on retail sales-tax revenue to fund their governments. Matheson recalled the friendly governor's race of 1964, when then-victor Democrat Cal Rampton went golfing with defeated Republican Mitch Melich the day after the election. "I hope that is the kind of relationship Jon and I are developing," Matheson said. And he hopes for the same election result, too, he joked.

But Utah has become much more Republican since. The state hasn't elected a Democratic governor since Matheson's father, the late Gov. Scott M. Matheson, won re-election in 1980. The latest Deseret Morning News/KSL-TV poll shows Huntsman ahead 49-39 percent.

Both men Friday slammed Utah's current tax code, praising the work of Gov. Olene Walker's expert tax-reform panel that will soon recommend broad-ranging changes.

Huntsman called the code discombobulated, uncoordinated, dilapidated and antiquated.

Local governments are "zoning for dollars," trying to entice big-box retailers into their boundaries by warring with neighboring communities, he said.