Public outcry alters tax bill

A bill that would raise money for schools by altering state income taxes won't change to ease the blow on wealthier Utahns after all, a bill sponsor said Thursday.

An onslaught of public outcry saw to that, said Rep. Steve Mascaro, R-West Jordan, who is sponsoring the bill with Rep. Patricia Jones, D-Cottonwood Heights.

Still, Mascaro knows the decision won't help win needed Republican votes. Regular folks, however, could step in.

"I'm not sure the legislators are absolutely clear on how strongly the public feels about this bill," Mascaro said. "My hope is they will have an opportunity to hear from their constituents . . . and vote the feelings of their constituents."

HB45 would both cut and increase state income taxes. It would adjust state income tax brackets; create a tax credit for residents earning up to about $35,000 a year; phase out the state deduction for kids; and ax the federal tax deduction, which would be the bill's main education funding source.

Mascaro says the bill would bring schools $88 million. Families of four with income of $50,000 a year or less would get a tax cut, while larger families and incomes would see an average tax increase of $3 to $5 per month per child. And the wealthier you are, the more taxes you'd pay because of the lost federal tax deduction.

That last element bothers some GOP legislators. So Jones and Mascaro agreed to phase out the federal tax deduction for wealthy families who don't get the federal child tax credit.

Their phones have been ringing off the hook ever since.

"What you've got is the average Utahns saying, 'We don't want the wealthy Utahns getting any more tax breaks,' " Mascaro said.

Publicly, the bill is noted for eliminating the child deduction, basically requiring people who use the public education system to pay for it. That would generate $60 million in new money for public schools in the first year, and $100 million once phased in, a legislative fiscal analysis shows.

By comparison, eliminating the federal tax deduction would generate $157.6 million immediately.

That amount offsets the bill's tax breaks for lower-income residents. Without it, the bill would end up pulling money out of the schools' coffers.

Mascaro says HB45 is the only bill proposing a new revenue source for Utah schools, which receive the least per-student funding in the country, and are expecting a 140,000-student growth spurt.

But eliminating tax deductions would amount to a tax increase, flat out, House Speaker Marty Stephens said.

And there's not a lot of support for that this election year from legislators or the public.

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