Utah's economy is on the rebound and a possibility exists that tax reforms that would significantly lower income tax rates are in the offing, Gov. Norm Bangerter said Tuesday.
Bangerter told the Amoco Alumni Club, a group of retired Amoco refinery employees, that some tax restructuring designed to return state surplus money is also in effect and Utahns should feel the benefit of that legislation, even if there is no special session dealing with a projected $100 million surplus. He said some other restructuring is being considered, especially allowing the deduction of federal tax payments."Taking that deduction away was probably a mistake and it looks like we'll be able to put that provision back," Bangerter said. The governor defended last year's tax hikes as necessary, especially with Utah's continued student population growth. But he said it is obvious some changes are needed because of the surplus. He said that federal tax restructuring forced states to make changes but that the changes were difficult to gauge because of a lack of experience with the new federal laws.
"We've got some experience now, and it will be easier to make changes," said the governor, "and there will likely have to be other adjustments in the future."
Referring to a tax-protest movement in the state, Bangerter said the state is pointed toward a head-on battle over high taxes, education and the state's business climate. He admitted that taxes are too high but believes the problem is better solved at the legislative level rather than putting in place inflexible tax-rollback laws being proposed by the tax-protest group. He said the lack of flexibility could be much more damaging in the long run because the state would be limited on ways to act on specific problems.
"No one likes to pay taxes but it is a question of equity," Bangerter said. "We'll never be able to satisfy everyone, but we must have the flexibility to try and be as fair as possible to everyone."