Utah's economy will remain rocky for the next three or four years, but energy growth in the mid-1990s should bring a modest upswing, according to panelists speaking Thursday at the 10th annual Utah Taxes Now conference in Salt Lake.
"In my judgment the economy is sound. We will do well in the Rocky Mountain region, but we will not break out of the Rocky Mountain region in any significant way," said R. Thayne Robson, director of the University of Utah's Bureau of Economic and Business Research.Robson joined Reps. Nolan Karras, R-Roy, and Mike Dmitrich, D-Price, during a panel discussion titled, "What's Ahead in Utah Taxes, Spending and Economic Growth."
Karras, Utah House majority leader, and Dmitrich, the minority leader, agreed that Utah's economy seems to have bottomed out. But they, too, felt the next three or four years are not going to be dramatically different from the past three or four.
As for the tax situation, Karras said the debate has shifted decidedly to the right. Fueled largely by the discussion over initiative petitions designed to roll back and reduce income and property taxes, he said, Democrats including gubernatorial candidate Ted Wilson are all sounding the no-tax-increase theme.
Karras said the debate in the coming election year will be how much debt the state can stand. Karras, long an opponent of building bonds, said the temptation will be to use bonding for short-term solutions to economic problems.
"The temptation will be to finance the government for the near term with bonds," Karras said. "My problem is that when you build things, then you have to clean and light them."
Dmitrich, however, said bonding is essential to meet the state's transportation needs. He said the state needs $300 million over the next 10 years to update the state's freeway system.
"Bonding creates jobs," Dmitrich said.
Karras also predicted that the tax petitions will affect any consideration of tax increases in the future. He said all future tax increases will likely be placed on the ballot. In fact, he said if lawmakers had realized the storm that would follow 1987's tax increase, they probably would have submitted it to the voters.
"We'd put the tax increase on the ballots if we had to do it over again," he said.
Karras also predicted that if either the income or property tax limitation petitions passes, there will be more reliance on business taxes in the future.
But Karras said whatever happens, Utahns must realize there are no quick fixes. The questions are complex and the answers, too, must be complex.
"We're all part of problem, and we're all unwilling to deal with it," he said. "We want someone to tell us what we want to hear. We want simple answers. A chicken in every pot and two cars in every garage."
Still, Karras said he is optimistic about the future.
"I'm not afraid of the future because I believe in the people of Utah," Karras said. "That sounds cornball, but I believe it because we have the people and we're not afraid to work hard. We have to go back to work."
Dmitrich said the state must find a way to generate revenue without tax increases. He suggested the creation of a state fund to be matched with local private dollars generated through "sin taxes," such as speeding tickets and fines.
Dmitrich also endorsed a state lottery. He said he recently returned from Kentucky, which will have a lottery on its November ballot and stands to gain up to $120 million if the measure passes.