SALT LAKE CITY — Advocates for low-income Utahns urged state lawmakers Thursday to find more money for education and other programs but avoid an "unfair and unjustifiable" tax increase on those who are already struggling.
"No one should be taxed into or deeper into poverty," nine organizations, including Voices for Utah Children, Utahns Against Hunger and the Utah Housing Coalition said in an open letter to the Utah Legislature.
Their letter spells out that "tax reform that increases the burden on low-income sectors of our population will do more harm than good for people struggling to pay for the basic necessities of life."
A separate group led by the Coalition of Religious Communities rallied atop the Capitol steps in the snow holding signs protesting the proposed food tax increase before heading inside to lobby lawmakers directly about the impact of an increase.
"For low-income families, food is a huge part of their budget," said Bill Tibbetts, of the coalition and the Crossroads Urban Center. "This is a tax shift onto working families, middle-income families."
The coalition, which describes itself as a multifaith response to poverty, handed out information to lawmakers disputing the notion that raising the tax on food will make the budget more stable.
The coalition's fact sheet suggested grocery store sales go up and down at roughly the same rate as nonfood sales because people cut back on how much food they buy or make less expensive choices.
The efforts from both groups come as GOP legislative leaders are putting together a tax reform package that would restore the full sales tax on food from 1.75 percent while reducing the overall 4.7 percent sales tax rate.
The GOP proposal, which has been given the go-ahead in closed-door Republican House and Senate caucuses, would also lower the amount of money Utahns can make before losing their state income tax exemptions and cut that rate, too.
Both pieces of the tax package are intended to be revenue neutral for the first year but boost tax collections over time by broadening the tax base even though the rate is lowered.
The legislation is still being drafted, and there is no estimate yet of how much additional revenue would be raised.
Senate President Wayne Niederhauser, R-Sandy, said the state needs a more stable source of revenues for social services and other programs. He said, too, that all Utahns need to contribute.
"If we're going to provide these social service programs, which they advocate for, then we have to have a revenue stream to fund them. Right now it's difficult, especially when you have ups and downs in the economy," Niederhauser said.
But Senate Minority Leader Gene Davis, D-Salt Lake City, disagreed.
"We want those on the lower end of the spectrum who receive those programs to pay for them. I think that's basically what we're telling them, if you want those programs you have to pay for them," Davis said.
Niederhauser said he believes "everybody should be paying a little bit into the system no matter what your income or your situation is," calling it a "buy-in, or a little bit of skin in the game," even if it is not an equal share.
Former Republican House member Holly Richardson, who spoke at the rally, said that argument ignores how much harder the food tax hits people already turning to food pantries and other assistance to make ends meet.
"We have people in our community who are struggling to put food on the table," Richardson said. "These are the working poor. These are people who are holding two and three jobs where they don't have benefits."
Richardson said to tell them they have to pay more taxes on food is not right.
"I don't think it's Christian. I am LDS, and my faith also says that we take care of the poor and the neediest among us, and we don't balance the state budget on the back of the people who can least afford it."
Lawmakers are looking at major changes to taxes because of a looming ballot initiative that would raise the state's 5 percent income tax rate by seven-eighths of a percent, more than a 17 percent increase, to bring in $750 million for schools.
An analysis presented by Matthew Weinstein, a director for Voices for Utah Children, showed that the GOP proposal to restore the full sales tax on food while slicing the rate would cost all Utahns, including those making less than $25,000.
Weinstein said 97 percent of the increase in food taxes would be paid by Utahns, but nearly a fourth of the people paying a lower sales tax rate would be tourists or out-of-state customers.
The most fair tax increase being talked about, Weinstein said, is the income tax initiative because its impact matches the state's income distribution and lawmakers could offer a refund or earned income credit to the poorest residents.
But both Weinstein and Tibbetts said their groups are not backing the initiative, known as Our Schools Now.
Initiative supporters, which include key community and business leaders, have said they will begin collecting voter signatures for a place on the 2018 ballot if lawmakers don't make enough progress on education funding.