Seldom, if ever, have Utahns been confronted with a more important decision than the one to be made next November when they vote on the tax limitation initiatives.
The outcome of this issue, as everyone well knows, can affect Utah's future dramatically for many years. Yet it isn't always easy to sort through this controversy because of the welter of conflicting claims and the strong emotions the fight has aroused.By now, the public must be well aware that the Deseret News made a financial contribution to opponents of the tax limitation proposals. That contribution should not have come as a surprise, considering that this newspaper has opposed previous Utah tax limitation plans since 1980. Consequently, it should be apparent that our conclusions about the merits of the propositions now on the ballot are strictly our own and not those of Taxpayers For Utah or any other group. More specifically, this editorial represents the views of our publisher and editorial board but not necessarily the views of our owners.
Meanwhile, if any one point in the current controversy is beyond dispute, it should be that discontentment and dissatisfaction in Utah run deep. That much is clear from the eagerness of so many Utahns to sign the tax limitation petitions, from the polls showing most Utahns favor the propositions on the ballot, and from the persistence of the tax limitation campaign. This is the third attempt in a decade to place caps on state and local taxes in Utah.
It's easy to sympathize with the impulses behind the tax limitation movement. Though other parts of the country are doing well, this state's economy is still suffering and plenty of Utahns could use some financial relief. Plenty of Utahns were angered by the 1987 tax hike, the largest one-time increase in the state's history. Plenty of other Utahns simply see tax limitation as a way to make state and local government leaner and more effective.
Such sympathy, however, doesn't automatically translate into total agreement.
The current tax limitation campaign is the third such effort in 10 years. One previous effort failed to get enough signatures on petitions, another made it onto the ballot but was rejected by the voters. Since Utahns have rejected two previous attempts at tax limitation, there's room for wondering why the state should change course now.
Though the state's economy is sour, it's bound to improve in the future just as it has in the past. While the 1987 tax hike was a jolt, it was undertaken in response to a serious crisis. What's more, that increase might not have been so large if the Legislature had previously granted a series of small tax hikes. The same people calling for tax limitation now are the same people who have been electing Utah's legislators and governors for many years - and those officials have been anything but spendthrifts.
Yes, the individual taxpayer in Utah often bears a heavy burden. But that's because Utahns want large families and a good education. As long as Utah has a higher proportion of its population enrolled in the public schools than any other state in the nation, Utahns must expect to make a greater than average tax effort.
Because education constitutes such a big portion of Utah's budget, it's hard to see how artificial tax ceilings can be imposed without impairing the quality of education in this state. Once that happens, Utah can impair its ability to attract new business and industry, since one of this state's main lures to potential employers is Utah's well-educated work force.
What about the potential impact of tax limitation in eliminating fat in state and local government? Since the exposure of the scandal at the Timpanogos Mental Health Center, this argument has become more appealing. But nearly 100 situations of the magnitude of the Timpanogos affair would have to be identified and corrected in order to save the $329 million that would have to be eliminated under the proposed new tax limits. It's hard to believe that much trimming can be done without cutting not just fat but also muscle and bone.
Then there are the federal matching funds Utah would lose by curtailing its own taxing and spending efforts. Less federal funding would, of course, mean less federal control, which would be a welcome relief. But Utah can't spurn federal funds unilaterally without putting itself at a serious competitive disadvantage in relation to other states. Moreover, it would be particularly hard to curtail federal help just now when Utah's economy is especially weak and vulnerable.
The tax limitation proposals also would restrict Utah's flexibility in dealing with changing economic conditions, particularly sudden emergencies. Some government services, after all, are most needed when the economy is weakest.
Consider, too, how the tax limits would hurt Utah's enviably high credit ratings. Moody's Investors Service reports that "in California, as in most other states where limitations have been imposed, tax limitations have had a generally negative impact on credit quality." Among the reasons cited by Moody's for this effect are the reduction in a government's flexibility to meet changing conditions, and the potential inability of a government to provide needed services, a factor that can alienate the public and dampen new economic growth.
Finally, human nature being what it is, there's a tendency to demand lower taxes but more government services even though it's usually impossible to have it both ways. That's why artificial limits on taxes often lead to backdoor methods for raising funds through fees and the creation of new special-purpose units that make government bigger and harder to monitor.
No wonder the propositions to be put on the ballot next November are being opposed not just by government and education leaders, but also by the Salt Lake Area Chamber of Commerce, Utah Manufacturers Association, American Association of Retired Persons, PTA groups, Utah Farm Bureau Federation, and other segments of the community.
All things considered, this state's best long-range interests will be best served if Utahns vote against the new propositions just as they rejected tax limitation plans before.