Raise food tax only under these conditions

Published: Sunday, Feb. 15, 2009 2:01 a.m. MST
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Utah's lawmakers have the unenviable task of closing a $1 billion deficit without causing irreparable harm to vital programs and without damaging the ability to keep government solvent should the current economic crisis get worse.

That task may get even harder this week when updated revenue projections are released. Many people expect the state's tax collections to be even worse than previously thought.

It's no surprise, then, that a number of ideas are floating around. One lawmaker, Rep. Kay McIff, R-Richfield, is proposing that the state reimpose the full uniform sales tax rate of 4.7 percent on grocery purchases. For philosophical reasons — it is wrong to tax food purchases because they are essential to life and the poor end up paying a larger share than everyone else — the state in recent years has reduced its share of food taxes to 1.75 percent. Gov. Jon Huntsman Jr. would like to remove the state's portion entirely, which is a laudable goal.

But McIff's reasoning has some merit. A food tax would be easy and inexpensive to administer and collect. It would have a minimal effect on the economy (McIff says buying patterns changed little when the tax was reduced, and he believes the same would be true if it were raised.) And the $180 million it is expected to raise could be used to keep the state from cutting important social service programs that help the poor.

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That may paint an unrealistic rosy view, but as budget-fixers go, this one may be relatively painless. We could support such a tax, but only if the following conditions were met:

First, the tax would need a sunset provision. In other words, it would have to expire on its own in two or three years. These are extraordinary times and the state needs money, but the philosophical reasons for removing the tax remain. Most Utahns today are too young to remember, but the sales tax itself was first passed by the Legislature as a "temporary" emergency measure during the Depression. More than 70 years later, it no longer seems so temporary.

Second, such a tax hike would have to come with a package of other measures. Most notable among these is a substantial hike in the tax on cigarettes. Utah currently has among the lowest cigarette taxes in the nation. And, while cigarette taxes would not generate as much money as a food tax, lawmakers can ill afford to send a message to Utahns that they believe it is OK to raise taxes on vegetables but not on deadly cigarettes.

The Salt Lake Chamber supports a package of measures that includes both of these taxes as well as an increase in gasoline taxes and registration fees. Lawmakers also should tap the Rainy Day funds.

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