There would be both good news and bad news if voters approve an initiative to roll back increases in the sales, income, cigarette and fuel taxes.
The good news is an average Utah family would save about $330 a year in taxes if the initiative passes. The bad news is the family could end up spending more than that for state services that may be cut as a result of the initiative's passage.A report issued by the Economic and Statistical Unit of the State Tax Commission says that if the initiative rolling back tax increases passes, most Utahns would see about a 1 percent increase in disposable income.
A typical family of four earning $32,000 a year would save about $330 a year, while a single person earning $20,000 a year would save about $190, and a single parent with one child earning $16,000 a year would save about $155.
The result of the tax cuts would be $141 million to Utah households - a tax cut that could boost Utah's economy.
"If people spend the money, sure it could have an impact on the economy," said state economist Doug Macdonald. "But the $141 million in cuts has to be from surplus funds for it to have a positive effect."
But taxpayers may never see an actual increase in spendable income. State officials say tax cuts could mean increased school fees, rougher roads (which translates into more vehicle repairs) and a rash of "user" fees for other traditional government services.
Jack Olson, executive director of the Utah Taxpayers Association, would not comment on these latest Tax Commission statistics, but he criticized the Tax Commission for "propaganda directly or indirectly intended to kill the initiatives."
"I resent it," he said. "I don't know if their figures are right, but I do know a lot of the junk they have put out is not factually accurate. I am sick and tired of opponents using the Tax Commission as a tool to defeat the the tax initiatives."
Tax Commissioner Roger Tew said both sides of the ledger must be examined. "Yes, you will have more income, but you have to look at what benefits are being cut and how much it will cost you to pay for the services you want out of your own pocket."
But if $141 million can be cut without affecting state programs or public employees, there will be a real positive effect on the economy, Tew said.
If $141 million in cuts translates into significant layoffs of public employees though, the costs to society in unemployment and reduced services may outweigh the economic benefits.
"Some state money goes to welfare, but a good share of it (70-80 percent) goes to wages and salaries (of state employees)," said Macdonald. "There are quite a few areas that can be cut before salaries are cut, but at least 50 percent of those cuts would have to come from salaries."
The perception that the $141 million is "free money" is just not correct, Tew said. Cutting state funds means cutting programs. "And programs translate to people performing certain roles," he said.