McIff urges boost in food tax

Rep. Kay McIff, R-Richfield, told the Deseret News editorial board Wednesday that budget cuts alone will not close the expected upcoming state budget gaps and outlined details of his controversial proposal to hike the sales tax on food.

McIff said raising the current food tax of 1.75 percent to the state uniform sales tax rate of 4.7 percent would net $180 million in annual revenues — $75 million a year more than the current rate raises. McIff said restoring the tax, which was incrementally reduced in the 2006 and 2007 sessions, makes sense right now.

"It has attraction because it's such a stable income source," McIff said. "When we took the food tax off, it made no difference in sales and when we put it back on, it won't make a difference either."

Salt Lake Chamber of Commerce president Lane Beattie appeared with McIff before the board and reiterated the need for new revenues, in conjunction with cuts, to achieve a balanced budget and characterized the food tax as an attractive option.

"We have to apply true business principals … we have to balance this thing," Beattie said. "So, when we say we have to bond … we also have to balance the other end of that. This (food tax increase) would be the possibility of one of the sources that literally is consistent and doesn't waiver over the years like some tax does."

Beattie told the board that the chamber would be presenting an economic stimulus plan today, with suggestions for a variety of new revenue sources including tax increases for food and gas and increased fees for vehicle registration.

Majority leaders in both the House and Senate have expressed little in the way of support for the measure.

Senate Republicans discussed the tax matter in their Tuesday caucus meeting but emerged from the closed-door session divided on the issues.

"There's sort of a split," said Senate President Michael Waddoups, R-Taylorsville. "There are those who thought we shouldn't have done it in the first place … there are those who thought it might be a partial answer" to state budget woes.

Senate Majority Leader Sheldon Killpack, R-Syracuse, said no vote was taken at the caucus gathering and Senate Republicans have no official position on the food tax.

House Speaker Dave Clark, R-Santa Clara, told the Deseret News editorial board earlier this week that he didn't see the issue getting much traction on his side of the Legislature. He also noted that the position of Gov. Jon Huntsman Jr., who has made it very clear that he is looking for a full repeal of tax on food, figures prominently in the debate.

"When you talk about sales tax on food, there is still one more player that's spoken up very adamantly on that," Clark said. "And I haven't heard him say that he would support that."

Huntsman spokeswoman Lisa Roskelley reiterated that "the governor has stated that he has the goal of reducing the food tax … and is not in favor of increasing that tax," Roskelly said.

Contributing: Lisa Riley Roche, Bob Bernick Jr.

E-mail: araymond@desnews.com