Huntsman supports food-tax bill

Gov. Jon Huntsman Jr. in his State of the State address Tuesday night basically endorsed a House-backed bill that would take all of the sales tax off of food.

In addition to backing by the governor, HB109 passed a House committee earlier in the day, and its supporters got more good news in the form of healthy tax revenue figures that could offset the loss of the food tax.

But in speaking to the House Revenue and Taxation Committee, bill sponsor Rep. Merlynn Newbold mentioned other reasons why the panel should endorse the bill: "This is the morally right thing to do," she said.

The South Jordan Republican added that her HB109 "benefits every citizen. It does not harm any one group. It has significant public support."

HB109's advancement in the House comes as the Utah State Tax Commission reported that for the first six months of the current fiscal year tax revenues are coming in $231 million over the budget. That's a jump of more than $100 million in just one month.

That good news further primes the Legislature's tax-cutting pump.

House Speaker Greg Curtis, R-Sandy, the moving force behind HB109, says he has more than 40 votes in the 75-member House for the bill — or some compromise close to it.

Huntsman's endorsement of removing all of the food tax and slightly raising the tax rates of local cities and counties to make up for any revenue losses puts political pressure on Senate Republicans, who appear to favor a different food-tax approach: Giving a $75 personal income tax rebate instead of removing the food tax.

How the food tax is handled has far-reaching implications, noted Rep. Gordon Snow, R-Roosevelt. Snow told the revenue committee that budgeters estimate the state will have $578 million next fiscal year in new revenue growth. Of that, $236 million will be in the state's General Fund, out of which comes any sales tax cut.

Considering other non-education needs — like Human Services — Snow worries either there won't be enough money in the General Fund or "we are looking at tax hikes" in other areas to balance the budget.

But between one-time surpluses and new ongoing tax revenue, legislators have $1 billion to allocate this session.

"We've all decided we'll have a tax cut next year," Newbold said. Completely removing the sales tax from unprepared food should be done, and revenues for the first time ever will allow it, she added.