Candidates tear into Utah tax code

Matheson said he wants to look at all of the current sales-tax exemptions. "There are more than $500 million" lost to state and local governments through the exemptions. "We need to look at those every five years and make (those getting the tax breaks) justify them."

That's tough to pull off, however. Former Gov. Mike Leavitt got the Legislature to dump half a dozen or so sales-tax breaks in the early 1990s. But the affected industries successfully lobbied lawmakers to restore the exemptions over the next two years, with Leavitt not vetoing their re-instatement.

Huntsman said the state is in "a death spiral economically" as the state loses jobs while the population grows, particularly the number of schoolchildren. "That is unsustainable," he said. The average wage also is below the national average. "We need not only jobs, but good-paying jobs."

How will state and local governments satisfy the mounting demands?

"We need to talk about what kind of voter approval may be needed if we give additional flexibility" to local governments to get more revenue, Matheson said, eschewing tax hikes. "I'll take that on" with the Legislature. "I'm for local empowerment; I'm for local decision-making."

While Huntsman said Utah's economy needs help, and taxes reformed, he believes the economic pie "must be grown" to get the revenues Utah needs.

True, said Matheson. But even if the state's economy grows at 5 percent a year — an optimistic estimate — there won't be enough money "to address all these problems." He says some tough budget decisions must be made to get more money for public education.

Huntsman said "something must be done" about the sales tax, otherwise it will grow so much that Utah becomes less competitive among the Western states.

While that may be a concern, a graphic placed on a large screen during the debate by league officials shows that the 6.65 percent sales tax in Salt Lake City is below rates in Houston, Los Angeles, Seattle, Denver and Phoenix.

Matheson said the explosive political issue of sales tax revenue distribution — how much goes to point of sale or delivery, how much by population of local areas — must be revisited. When groans were heard from the audience, he added: "Not say we do it, but (be) part of the discussion." "Too many people (taxing districts) have a call on the sales tax," said Huntsman, from transit districts, to arts and zoos, to open space.

But asked if they support specific proposals on November's ballot, both candidates said they support earmarking a small part of the sales tax for open space preservation.

On other issues, Huntsman said he supports Amendment 3 (the protection of traditional marriage proposal), while Matheson opposes it.