ST. GEORGE — Following the Tax Restructuring and Equalization Task Force’s vote Thursday to adopt a tax bill that would completely overhaul the current system, multiple groups have filed citizen referendums to challenge its approval.
The referendums seeking a public vote on the bill are possible since the tax bill did not pass by a two-thirds majority. The first referendum was filed with the state by former state representative Fred Cox as the Lt. Governor’s Office opened Monday morning. Cox’s referendum is co-sponsored by a number of organization leaders, including Utahns Against Hunger Executive Director Gina Cornia.
More recently, Steve Maxfield from The People’s Right said the organization will file its own referendum Tuesday afternoon.
Each of the referendums is required to collect more than 115,869 signatures to qualify for the ballot. Cox said they are expecting to use volunteers to gather the signatures; however, Maxfield’s organization is planning to hire people to gather the required signatures.
“It’s unfortunate that is has come to this,” Maxfield wrote in a statement, “the only way for the citizens to participate in the larger, organic and ultimate legislative process is to beg special interest for the estimated 5 million dollars to gather the signatures, in the time, manner, and in the number as provided by statute.”
Alex Cragun, food security advocate with Utahns Against Hunger, said in a statement sent to St. George News that lawmakers operated on the false presumption that low-income families don’t fairly contribute to taxes. This idea is completely unfounded, he argued, adding that families pay taxes on their children’s clothes, gas for their cars, property taxes that are built into their rent and on the utilities they use to heat their homes.
The Tax Restructuring and Equalization Task Force’s bill only “tightens the squeeze felt by families and individuals who aren’t benefiting from the current economy,” Cragun said. With the ever-increasing cost of housing and food increasing across the state, residents are becoming more in danger of hitting a financial crisis.
Cragun argued that despite the thousands of voters who participated in the statewide town halls, attended the task force meetings on Capitol Hill and spoke out against the proposed legislation via phone calls, emails and letters to their legislators, the concerns fell on deaf ears.
“This tax increase will do real harm to Utahns,” he said. “It will diminish the quality of life for far too many families and individuals living on the edges. The Utah Legislature is accountable to them and every citizen for their actions in passing this bill.”
From the beginning of the conversation, he said, legislators called the bill “a done deal” and told organizations “the train had left the station.”
When the task force was first announced, legislators told St. George News that “everything is on the table,” and West Valley City Sen. Karen Mayne said “there’s not anything that’s being ignored.”
Task force co-chair Sen. Lyle Hillyard told St. George News in September that the task force wasn’t going to rush the process and would wait to introduce legislation until next summer, if necessary. He said that they did not have a deadline and were hoping to “do it right, not do it fast.”
However, while they might not have had a deadline, the task force did state they were hoping they would have their report done by fall or winter in order to hold a special session of the Legislature, which was called by Gov. Gary Herbert on Dec. 10.
Supporters of the bill 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.
The bill that was passed Thursday increases sales tax on food and allows the committee to open a bill file to amend the state Constitution to dissolve the revenue silo created by a constitutional tax earmark to fund education. The change requires two-thirds support in the Legislature and the approval of Utah voters.
Sales tax on food will increase from 1.75% to 4.85% with an annual income tax credit of up to $125 per person and an overall decrease in income taxes to lessen the impact the increase would have on households.
The overall income taxes will decrease from 4.95% to about 4.64%, but legislators plan to recoup the costs by issuing sales tax on a number of services, including vending machines that accept credit or debit cards and admission to college sporting events.
Legislators expect the bill 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 a $160 million tax cut for Utah residents.
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