From Deseret News archives:

Legislator suggests $80 million tax cut

It would be part of plan to set a statewide 6.25% sales tax rate

Published: Thursday, Aug. 11, 2005 11:31 a.m. MDT
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Other areas of the state would see a drop in property tax rates, such as Utah County. There, residents of Vineyard would see a drop of $106 on their property taxes while in Provo, the bill would decrease $76 on a $181,000 house.

The task force's subcommittee on sales taxes, where the proposal was introduced, took no action. However, Minority Caucus Manager Roz McGee, D-Salt Lake, questioned whether school funding should be involved at all.

McGee said the "overriding intent" of any tax reform should be to improve education. McGee said in an interview after the meeting that under the proposal, "we might get some equity in sales tax but we might then get some inequity in what counties do in education."

Just how successful the proposal will be remains to be seen. Gov. Jon Huntsman Jr. has already opposed any tax cuts associated with the tax reform process even though the state has collected hundreds of millions of dollars in unanticipated revenue recently.

"It is just another proposal at this point," the governor's spokeswoman, Tammy Kikuchi, said of Harper's plan. "It needs to be considered in the full context of the tax reform effort. The committee is not really viewing this as a tax cut but more of a shift."

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Senate President John Valentine, R-Orem, said as the "boutique" sales taxes are shifted around, income taxes will be used to make schools whole. "There will be no loss" to the schools, Valentine said.

Harper's proposal "takes the state in the right direction," said Valentine. One of the goals of the task force is to simplify state taxes. Having a single sales tax rate across the state is a big step toward that goal, Valentine said.

However, the proposal may have troubles on many fronts, including the fact that small sales and property tax cuts may not be recognized by citizens, limiting the political mileage legislators might get out of it.

All 75 House members and half the Senate are up for re-election next year. Legislators say it would be nice if an $80 million tax cut were remembered, but Valentine acknowledges that reducing the sales tax in, say, Alta Town, from the current 8.1 percent to 6.25 percent may not be noticed, and so not appreciated in the November 2006 elections.

In other action by task force members:

• The committee voted to draft a 4 percent flat-rate income tax bill that has no deductions for charitable giving, mortgage interest or any other current tax breaks. A number of the committee members said, however, they would not ultimately support a 4 percent flat-rate tax. Kikuchi said the flat-rate vote is "a great starting point. It's gratifying to see the discussion moving forward and we'll wait to see how it is discussed in the Legislature." The governor, she said, supports "a flatter, simpler tax that does not negatively impact those on the lower end of the income scale."

• Tax increase notices published in newspapers will be streamlined in an effort to make them less confusing. Members of the property tax working group asked that all interested parties, including local governments and school districts, submit revisions that would help taxpayers better understand how they will be impacted, whom to contact, and when to speak publicly above the proposed increase without being weighed down by the excessive legal or financial jargon present in many notices.

"I see these notices every day in the newspaper, and I think they're generally confusing to the public," Rep. Gordon Snow, R-Roosevelt, said. "I think we need to find a way to make them simple."


Contributing: Josh Loftin

E-mail: lisa@desnews.com; bbjr@desnews.com

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