Between now and November, voters can expect to be barraged with information for and against the three tax limitation initiatives that won a spot this week on the general election ballot.
The victory was only half the battle for the Tax Limitation Coalition, the group behind the initiative petition drive. Still to come is the confrontation with the Taxpayers for Utah, an influential group formed to oppose the initiatives."It's going to be the shortest half time in history. I think you're going to see both sides coming out strong," Deputy Lt. Gov. Dave Hansen said, predicting only a momentary lull before the battle begins in earnest.
Both organizations will be struggling to sway public opinion about the initiatives, which would limit property taxes, roll back tax increases approved by the 1987 Legislature and provide tax credits to the parents of children in private schools.
A simple majority of votes for the People's Tax and Spending Limitation Amendment would place limits on property taxes almost immediately and place a more complicated cap on government spending for the next budget year beginning after Dec. 31, 1988.
With the same margin, the People's Tax Reduction Act would roll back the state income, sales, gasoline and cigarette tax increases passed by the 1987 Legislature. The rollback would take effect Dec. 31, 1989.
And a simple majority is all that is needed to pass the Utah Family Choice in Education Act, which would begin giving parents a tax credit at the beginning of the next school year if they send their children to private schools.
Both sides agree a lot is at stake in the Nov. 8 election. Those favoring the initiatives promise a boost in the state's lagging economy through tax breaks. Those opposing the initiatives warn of the devastating effects of cutting $349 million from government budgets statewide.
Following are the responses the Deseret News received from both the Tax Limitation Coalition and the Taxpayers for Utah to a series of questions on the initiatives. The answers have been edited for space.
Why should/shouldn't voters support the tax initiatives? Address each one: the proposal to roll back taxes, the proposal to limit property taxes and the proposal to give parents of children in private schools a tax break.
Tax Limitation Coalition: The three initiatives represent an opportunity for voters to rein in government, improve its operational efficiency and improve education.
Utah has one of the highest tax burdens in the entire United States, based on capacity to pay. Before the last tax increase, we ranked No. 9in total taxes and No. 5 in sales tax. We are one of 16 states that taxes food and medicine.
In total the three initiatives would at most reduce government revenue by about 6 percent. The stimulation to the economy from reduced taxes would increase revenues to some degree and help ease the cuts. Many Utah citizens and businesses have been forced by increased taxes to cut their own income and operating funds by much higher percentages. Now it is time for government to do its part.
Tax rollback: Rolling back the tax hike of 1987 would correct a major governmental mistake. Enacting the largest tax hike in the history of the state during and because of a recession was wrong.
The tax rollback would stimulate the economy by putting money back in the hands of the people of Utah. It would also solve the problem of having to make tax rate adjustments to reach the 1987 agreed-upon revenue increases. As things stand, if the current tax rates are not radically changed, the people of Utah will be faced with another tax increase caused by the mistakes of their government. Truly taxation without representation.
Tax limitation: Placing a cap on property taxes would greatly ease the burden on those living on fixed incomes such as our senior citizens. The property tax is generally agreed upon to be the most unfair of all taxes.
This initiative would also tie government spending to a formula based on population growth and income. The law has been on the books since 1979 and this initiative would activate it.
Most important and seldom mentioned, this initiative would require that all future tax hikes be submitted to the voters for their approval.
Tuition tax credit: This initiative should be called the public school survival act. Its provisions favor the public school system far more than they do private schools.
Utah currently spends about $2,300 per child per year from all sources. By allowing parents who choose to send their children to private school a $500 or $600 tax credit, the remainder of the $2,300 is freed up and could be used for the public system.
Taxpayers for Utah: The reason voters should reject the initiatives is the impact the proposals will have on public services, particularly public education. People with common sense realize that you do not get "something for nothing."
Therefore, the elimination of $350 million from budgets at all levels of government must of necessity result in reduced services. The average budget reductions will be at least 13 percent and in some cases, particularly in certain school districts and counties, the impact will be much more. Claims that the savings can be made in administrative costs, etc., which represent at most tiny amounts are simply unsupportable.
This simple truth must be understood by all Utahns: The elimination of $350 million involves cuts of major proportion from basic services. Since education represents the single largest budget area it will logically see the largest cuts. That means that many basic services which most Utahns now regard as essential will not be available in the future. This statement while indeed frightening is not a scare tactic - it is the truth. Furthermore, we believe it is self-evident to everyone.
As Utahns we have a rich history and heritage of building together for our present and future. Now is the time to say NO to the initiatives and NO to those people who want to go their own way and tear Utah apart.
What's wrong with the opposition's arguments for/against each initiative?
Tax Limitation Coalition: The opposition's argument is based for the most part on fear. No one knows where cuts will be made. By selecting cuts that will hurt the most people and those who need help, the opposition sows fear in the hearts of the people. For example, it is said that handicapped persons will suffer, thousands of students will be denied access to higher education, kindergarten and 12th grade may be cut, etc.
Sen. Ivan Matheson of Cedar City said it best in a letter to Taxpayers for Utah when he called for an end to scare tactics and for integrity in presenting the issue to the public.
The opposition does not seem to understand that the initiatives are about tax cuts, not about where to make the cuts. Setting priorities and allocating resources is what politics is all about. It is up to the politicians to make cuts if the initiatives pass or be replaced by those who can.
Taxpayers for Utah: The debate over the initiatives is really a debate between rhetoric and reality. Initiative supporters argue that taxes can be cut $350 million without any impairment of public services. However, they steadfastly refuse to describe how this is to be accomplished. Futher more, anyone who demands specifics is automatically accused of engaging in "scare tactics" and of being part of a conspiracy. That is rhetoric!
Initiative opponents, however, which include virtually every responsible business, education and government leader in Utah, deal in reality. They know that taxes buy services and that the largest service is education. They know that Utah of 1988 is totally different than California of 1978. They understand that economic growth does not simplistically follow tax cuts, but occurs in places where people are willing to invest in themselves. Moreover, they must make their decisions in public and defend them with facts.
In summary, the tax protester's arguments are those of individuals without responsibility for their actions. They demand tax cuts but will not identify service cuts. They provide no evidence to back up their claims and continually refer to shadowy, secret studies to substantiate massive waste and inefficiency. Lastly, they personally attack anyone who disagrees with them.
What will happen if the initiatives pass? How will state and local governments be affected? How will the average Utahn be affected?
Tax Limitation Coalition: If the initiatives pass adjustments will have to be made in the way our governments are run. The first thing that will happen is that priorities will have to be set and resources allocated to support those priorities.
All governmental entities will have to review their operations and make adjustments. The town of Santaquin has already done it, cutting over 17 percent form last year's budget without reducing services. No governmental entity likes to cut back, but they will have to.
The average Utahns will benefit from passage of the initiatives in two ways. He or she will have more money to spend. Second, all will benefit from the improved economic climate brought on by tax cuts. The opposition cannot name a single state that has not benefit economically from a tax cut.
Taxpayers for Utah: The initiatives will affect both state and local government revenues. However, the reduction by level of government varies. In state government the overall reduction of state revenues is more dramatic because state revenues are used to match federal grants. If the state cannot meet federal match requirements they cannot get the federal money. Eliminating the Medically Needy program, which serves about 10,000 persons each year by paying the bills for catastrophic medical expenses, would save about $3.5 million but would lose $10.5 million in federal funds.
Overall, education is the real loser with these initiatives. Education receives 66 percent of state government's operation budget and public education receives 51 percent of the property tax revenues. The state Board of Regents has indicated that they would have to raise tuition by 25 to 30 percent and still turn away 8,000 to 10,000 students if they initiatives pass. Furthermore there is a real possibility that one of the smaller institutions would be closed.
Public education will take approximately a 15 percent cut from the initiatives. This is a dramatic cut on a system that already has the highest teacher-student ratio and one of the lowest administrator-student ratios in the nation. One cannot find the amount of money necessary in administration or in capital construction.
The basic program of public education will be affected. Since kindergarten is not required by law as are grades 1-12, this program will be dramatically reduced or eliminated. Busing will be significantly reduced. Almost all optional programs would be eliminated such as bilingual programs. Large fee increases for all sports, etc., would be necessary if they are to be maintained. Finally, 8 to 10 percent of the state's teachers would have to be terminated.
Local governments would have to reduce their services. Libraries would be hurt worst because almost all of their funds come from the property tax. Senior citizens services and centers would be another area heavily impacted because these programs are not as critical as public safety services. There would be a reduction of most if not all of the preventive health services at the county health clinics.
But even reducing these areas would not be enough. The essential services of local government, namely police, fire and road construction and maintenance would have to be reduced. Finally, increased fees would occur for business licenses, building permits, recorder fees, ambulance service and title searches.
What will happen if the initiatives don't pass? Will lawmakers be pressured to make any changes in the state's tax structure? Will there be another attempt to lower taxes through the initiative process?
Tax Limitation Coalition: Even if the initiatives don't pass they have already benefited the people of the state. Politicians are now far more careful than they were about tax issues.
The initiatives have focused public interest on governmental efficiency and costs and this has already brought savings. While it is unlikely that the Legislature as presently constituted will take action to reduce taxes, it is likely to be a long time before they try and jam another "insider" tax hike down the voters' throats.
It is likely that the initiative process will be used again soon in the event these initiatives don't pass.
Taxpayers for Utah: The state of Utah, county and local governments, school districts and colleges and universities are already operating with lean budgets. We can be proud that they are among the most productive and cost efficient in the nation at all levels. Even with their achievements, each will continue to find greater efficiencies and productivity. The lawmakers, the public, and public officials will continue to work together to find those efficiencies. But not through the meat-ax approach that the initiatives mandate.
Once the full impact of the federal income tax reform and our state income tax is determined, refinements and adjustments can and should be made by the people and the governor working with the Legislature. Public and higher education must continue to find greater efficiencies in administration and program management while improving the quality of their programs. County and city governments will also be urged to consider more efficient programs and forms of government to eliminate overlapping services and cut costs.
Assess the chances of the initiatives passing in November.
Tax Limitation Coalition: Support for the rollback and the limitation initiatives has remained fairly constant since last fall, varying only within the margin of error of the polls.
A tremendous effort has been made by the establishment and special interests to first convince people not to sign and now to vote against the initiatives. Largely, it has been based on emotions and has been unconvincing to the thinking people of Utah. We believe that these two have a good chance of passing but we expect to see lots of money spent by special interest groups between now and November.
Support for the tuition tax credit has slipped about 10 points with less than half those questioned now supporting it. We expect that more discussion on the subject of education will strengthen that support and point out the obvious benefits the initiative has for the public system.
Taxpayers for Utah: The chances of the initiatives passing will depend on the willingness of each voter to understand the impact of a $350 million-plus reduction in education and government services. If you ask any taxpayer, "Do you want to lower taxes?" the answer will be overwhelmingly yes. That is why the early polls show such a high support for the initiatives.
However, each voter in the initiative election will be in the same shoes as the Legislature in the 1987 session. They must balance the question of "Do I want lower taxes?" with the question, "Do I want significant program reductions in education, state and local government?" After 45 days of studying the issue very carefully and listening to the people about the impacts of the program reduction, a very conservative Legislature voted by over two-thirds in a bipartisan vote in each house to not have the significant program reductions to education and government. They found the cost to Utah's future was too great.