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Frank Pignanelli & LaVarr Webb: What are the tough issues facing Utah's Legislature?

Published: Sunday, Dec. 2 2012 12:00 a.m. MST

Former Utah Gov. Jon Huntsman and former House Speaker Greg Curtis championed a partial elimination of the food tax and deserve praise for their empathy.

Tom Smart, Tom Smart, Deseret News

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The fun of the election is over, and now policymakers must focus on tough issues, like these:

Will, and should, the Utah Legislature restore the sales tax on food?

Pignanelli: "[Utah's sales tax] was considered an emergency and temporary tax to expire on April 1, 1935, or sooner by proclamation of the governor." — Economic Report to the Governor. In my long-haired, wild-eyed days I consistently screamed in the media about the regressive nature of sales tax and its unfair impact on low-income families. I worked with fellow legislators to repeal this horrible burden on the most basic of human actions — the consumption of food.

However, grocery stores raised legitimate nervousness of checkout clerks sorting items subject to tax. Fortunately, 21st-century technology addressed this issue, and Gov. Jon Huntsman Jr. and House Speaker Greg Curtis championed a partial elimination of the food tax and deserve praise for their empathy. (On occasion, Curtis will intimate that he rammed the sales-tax repeal through the House to spite me after I challenged him in this column and other public arenas that he lacked the male fortitude to pass the measure. At least my obnoxious behavior accomplished something.)

Utah is blessed with intelligent tax wonks who advocate for sound revenue policies, which include reinstating the sales tax on food. They make a compelling case ... and I don't care. I will begrudgingly cough up taxes on important elements of life including my house, my wine and my HBO. But I will fight to the death against any further surcharges on my pasta. So there.

Webb: If we want adequate funding for myriad government programs, we need a stable, broad tax base with low rates. It makes no sense for liberals and advocacy groups to oppose restoring the food tax. Low-income people would come out ahead, and in the long-term, more money will be available for government programs they depend on.

Sen. John Valentine's proposal would restore the sales tax but reduce the overall sales tax rate to keep revenue neutral. But then he would also give low-income people the equivalent of what they will be paying in food tax. So they get lower rates on everything they buy, plus get back what they pay in food taxes. That's a net tax cut. It's a sweet deal. No one can say it's unfair or that we're hurting poor people. Restore sound tax policy. Tax Frank's pasta.

Will, and should, the governor and the Legislature accept Obamacare's Medicaid expansion?

Pignanelli: The Affordable Care Act (aka Obamacare) is a well-intentioned, poorly developed effort that is already suffocating from a morass of regulations and shoddy Washington accounting. But Medicaid expansion is a different matter. Failing to enhance Medicaid — which allows lower-income working families and individuals greater access to medical care — is the more expensive choice.

The uninsured use the emergency room and other costly treatments that are passed on to the private sector. Medicaid expansion is an opportunity for our officials to push for flexibility from the federal government to administer a necessary state-based program using Utah features … because the remainder of the Obamacare safety net may collapse.

Webb: Beware of the federal government bearing gifts — in this case tempting states with billions of dollars to make millions more people eligible for Medicaid, a gigantic entitlement program. Utah leaders face enormous pressure from advocacy groups to take the money.

The feds will initially pay for nearly all of the expansion, with the states kicking in 10 percent by 2020. Here's the problem: The federal government is expanding Medicaid with borrowed money. How long can it last? The nation faces $88 trillion in unfunded liabilities. That's what we're dumping on our children and grandchildren. Medicaid is already an increasing burden for Utah taxpayers. We should be reducing entitlement obligations, not expanding them.

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