Tax official opts to retire after memo

The longtime chief economist of the Utah Tax Commission quickly retired last week after getting an internal commission memo warning him and two co-economists not to give their opinions on state tax policy.

The warnings are not out of the ordinary, says tax commissioner Palmer DePaulis, who sent out the memos.

But Doug Macdonald, who had 27 years with the commission, said he felt pressured not to speak on various tax issues, including the upcoming debate in the Legislature over Gov. Jon Huntsman Jr.'s "fairer, flatter" personal income tax.

Macdonald was a regular on Capitol Hill, testifying before legislators both in and out of the general session. His office puts out dozens of complicated tax/economic reports each year, including the TC23 monthly reports that track state surpluses/deficits as billions of tax dollars are collected by the commission.

DePaulis, a Democrat who served as Salt Lake City mayor in the mid-to-late 1980s, said as a matter of routine he sent the memo to Macdonald and two other economists in the Tax Commission's economic unit, which Macdonald has headed for years.

"I decided to send it out, again, (after) the Legislature," DePaulis said. It had nothing to do with Huntsman's upcoming May special session on income tax reform, the commissioner said.

"There are times when some Tax Commission officials give their own opinion on a tax issue," DePaulis said. He wants to make sure listeners don't confuse those private opinions, believing instead they are the official stand of the Tax Commission itself.

In part, the memo said: "To avoid any misunderstandings, the staff should only give clear, unbiased and objective data and information while representing the Tax Commission in a public meeting, and that information should be given without subjective nuance or argumentative tone. Therefore, when staff is representing the Tax Commission or acting as an agent of the Tax Commission they are not free to express their own positions, opinions and views. . . . In the future, if this guidance is not followed, disciplinary action may be taken."

"There are more than just four opinions that should matter" on the large change that Huntsman's flatter-rate income reform will bring, Macdonald said. He was referring to Huntsman's so-called "brain trust" of several tax experts, both professionals working outside of state government and economists inside of Huntsman's office, who have been drafting and lobbying for the tax changes for more than a year.

DePaulis said the memo was in no way meant to "gag" any opinions on tax matters and that the memo had nothing to do with the personal income tax debate in the Legislature.

Macdonald said the memo was just one reason, but not the only reason, he decided rather quickly to retire. Tax Commission spokesman Charles Roberts said Macdonald notified the commission last Thursday he was taking early retirement and left on Friday.

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