ST. GEORGE — Gov. Gary Herbert has issued a call for a special session of the Utah Legislature Tuesday afternoon.
During the special session, legislators will touch on amendments to state law related to state and local taxes and revenue, as well as one-time appropriations for behavioral health. The special session is expected to begin Thursday at 5 p.m. This call follows a formal and written request from President J. Stuart Adams and Speaker Brad Wilson.
“Stabilizing our tax system is necessary,” Herbert said in a statement. “The decisions we make today will impact our children, grandchildren and even great-grandchildren.”
Passing the bill is a necessary first step in creating a stable system that can support Utah well into the future, Herbert said. While this does not mean collecting more taxes, it does mean collecting the same amount of overall taxes from “a wider segment of the economy,” he said.
The Tax Restructuring and Equalization Task Force’s bill proposes an increase of sales tax on food and allowing the committee to open a bill file to amend the state constitution. The bill file would allow the dissolution of a revenue silo created by a constitutional tax earmark that funds education. The change requires two-thirds support in the Legislature and the approval of Utah voters.
Alex Cragun, food security advocate with Utahns Against Hunger, told St. George News in a previous interview that the legislation needs more time due to the significance it holds in the lives of all Utah residents. With such influence, a decision on the legislation should be made in the next general session, he said, and not within a special session.
Before making this decision, the governor said he carefully considered potential policy implications of the current tax bill and the issue of timing. After making his assessment, Herbert came to the conclusion that the current tax bill should be addressed in a special session so that legislators can set base budgets available for allocation during the upcoming general legislative session.
Sales tax on food would increase from 1.75% to 4.85%, although legislators have included an income tax credit of up to $125 per person annually and an overall decrease in income taxes to lessen the impact this change would have on households.
The legislation would also recoup the costs of decreasing overall income taxes from 4.95% to about 4.64% by extending sales tax to a number of services, including vending machines that accept credit or debit cards and admission to college sporting events.
The drafted legislation is projected to generate about $570 million in general fund revenue and decrease income tax revenue by about $650 million, resulting in an about $80 million overall tax cut. The newest draft of the legislation, however, touts around a $160 million tax cut.
Supporters of the proposal say it is aimed at helping expand the state’s shrinking sales tax base, address balance issues within the current tax structure and increase flexibility within the general fund as Utah’s population continues to grow. In fact, Herbert said 86% of Utahns will pay fewer taxes annually.
“If we build more stability into the taxes Utahns already pay, we will be able to create a system that can support generations of Utahns without increasing the tax burden,” he said.
Legislators must to continue their work in order to continue to provide a balanced approach to tax reformation, Herbert said. Utah’s strong, ever-changing economy requires constant assessment to ensure the system remains “stable, equitable and fair.”
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