Utah Senate passes $160 million income tax cut; advocates say it’s not enough

ST. GEORGE — The Utah Senate passed a $160 million income tax cut bill Friday.

Sen. Daniel McCay, R-Riverton, speaks on the Senate floor about SB 59 and the $160 million income tax cut it would provide Utah families, Salt Lake City, Utah, Jan. 28, 2022 | Photo courtesy of the Utah Legislature, St. George News

Senate Bill 59, sponsored by Sen. Daniel McCay, R-Riverton, and cosponsored by 22 other state senators, drops the current income tax rate from 4.95% to 4.85%. It passed the Senate in a 22-5 vote.

From data shared by McCay during a hearing of the Senate Revenue and Taxation Committee held Thursday, the tax cut equates to nearly $100 in annual savings for a Utah family of four making $72,000. For a family of four that makes $40,000, that would equate to $45 a year.

“Over the last few years, the Legislature implemented significant tax reductions,” McCay said in a press release following the bill’s passage in the Senate. “Because of conservative, fiscally sound policy, our state is in a position to reduce taxes across the board. Income tax is burdensome on Utah families and a targeted approach to giving income tax relief will benefit all Utahns.”

McCay went into detail on tax cuts passed by the Legislature over the last five years on the Senate floor Friday.

In 2018, the Legislature passed a $56 million income tax cut when the rate went from 5% to 4.95%. Later in 2021, cuts to the state tax on Social Security passed to the amount of $18.3 million. Military retirement income tax was also cut to the amount of $24.6 million, with another $55 million in personal personal tax exemptions passed by the Legislature.

Stock photo for illustrative purposes only | Photo by Diy13/iStock/Getty Images Plus, St. George News

This year, the Legislature is putting $350 million in new funding toward education and also looking at additional cuts to the Social Security tax and the creation of an earned income tax credit as SB 59 enters the House. The state’s food tax may also be up for consideration, McCay said.

While SB 59 passed out of the Senate committee Thursday following a 6-2 vote, Taxpayer advocates wanted to see deeper cuts of 4.6% or 4.5%

“We can do better” was a common phase among these advocates as they spoke to the committee.

“I say it’s stingy,” Utah resident Heidi Balderie said. “Please consider 4.5%. We can afford it.”

Heather Andrews of Americans for Prosperity said states surrounding Utah have lower income tax rates and Utah needs to make its rate lower to be competitive. She called the proposed 4.85% rate premature, as it was decided on ahead of new state revenue projections set to release next month. Numbers are expected to be better than those previously released and would support a deeper tax cut, she said.

On the other hand, opponents to the tax cut said the state has a gap in its funding for its social programs that needs to be addressed. The $160 million the state has set aside for the tax cut should go toward those programs, they said.

“It’s repugnant to hear about tax cuts” when the social programs need funding, Utah resident Lisa Stamps said during the hearing.

Sen. Luz Escamilla, D-Salt Lake City, held this view as well and voted against the bill while in committee and on the Senate floor. She also voiced her support for repealing the state’s food tax, as that would provide “immediate relief” to families in need.

Sen. Gene Davis, D-Salt Lake City, also voted against the bill in committee and in the Senate.

Sen. Gene Davis, D-Salt Lake City, speaks against SB 59 as he states money it has set aside for a tax cut could be better used by giving state employees better wages, Salt Lake City, Utah, Jan. 28, 2022 | Photo courtesy of the Utah Legislature, St. George News

He shared concerns about the state not being able to provide meaningful wages for state employees and felt the $160 million could be better spent providing them with higher wages that, as he put it, could help raise the quality of life for state employees and help make some no longer reliable on SNAP benefits.

An objection to the tax cut in favor of more funding for K-12 education and higher education was also raised.

McCay said the state’s overall budget this year is $25.6 billion, with education getting around 27% of that. Rainy day funds for education also amounted to around $600 million, he said.

“Right now, we are more prepared than ever for a rainy day,” he said, adding there is also a large amount of one-time money that can go to the state’s other needs like education and social programs.

Stock photo.| Photo by
zhudifeng/iStock/Getty Images Plus, St. George News

During the vote on the Senate floor, Sen. Curtis Bramble, R-Provo, said opponents to the bill had neglected to mention a demographic of people the money from the tax cuts would help – regular Utah taxpayers. They are the ones who pay for the social programs opponents said needed more money, so why not provide them with some relief, he posited.

“Looking out for the taxpayer has been one of the key components that’s been left out of the debate,” Bramble said.

Senate Majority Leader Evan Vickers, R-Cedar City, who McCay said transferred his own income tax bill to him, voted in favor of SB 59.

“We need to implement a tax policy that puts more money back into the hands of Utahns,” Vickers said in a statement. “Each and every Utah taxpayer, no matter their income, will experience a tax cut. Working families and individuals will get to decide how they spend more of their hard-earned dollars.”

Other state senators representing Southern Utah who voted for the bill include Don Ipson, Derrin Ovens and David Hinkins.

SB 59 now goes to the House for consideration.


Check out all of St. George News’ coverage of the 2022 Utah Legislature here.

For a complete list of contacts for Southern Utah representatives and senators, click here.

Copyright St. George News, SaintGeorgeUtah.com LLC, 2022, all rights reserved.

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