SALT LAKE CITY — Governor Gary Herbert has signaled he will sign a bill that makes major changes to Utah’s tax code, cutting the income tax but also raising the taxes on food, fuel and some services.
“I commend the legislature for their courage and forward thinking in working to address the difficult issue of tax reform. The bill they passed this evening takes measurable steps toward improving the stability and equity of our tax system. We have meaningful work yet remaining. However, these steps will improve the future of our state and its people. I look forward to signing it,” he said in a statement.
The legislature passed the tax reform bill in special session on Thursday night. It offers $160 million in income tax cuts. Lawmakers also implemented a hike on the sales tax on food, raising the tax on gasoline and taxing some services like streaming media, ride shares, pet grooming and even dating services.
Republican leaders on Capitol Hill have argued that the tax reform was necessary to address a budget imbalance. The income tax is earmarked for education only. Sales tax, which has not seen the same level of growth as the income tax, pays for a lot of government services. They have argued that what passed is an overall benefit for Utah families by offering an overall tax cut.
The tax plan, which has been in the works for almost a year, has faced significant public pushback. Groups on the right and left have opposed it for various reasons. Anti-poverty groups say raising the sales tax on groceries will hurt the poor, while conservative leaning groups have been vocal in their opposition to a sales tax on some services.
“Utah Eagle Forum opposes ALL sales tax on services,” Utah Eagle Forum Executive Director Maryann Christensen posted on Twitter. “Those who provide services are ALREADY TAXED on every car, truck, tool, tire, gallon of gas, uniform, employee, supply, etc, etc, etc! To tax their service is to tax taxes.”
Lawmakers have not addressed the earmark for education, which would require a constitutional amendment and a vote by the people. House Speaker Brad Wilson, R-Kaysville, told reporters on Thursday night he would like to meet with education leaders before advancing that idea in the 2020 legislative session.
The special session vote could also see some more public pushback. In the final votes, the House and Senate both failed to get a two-thirds majority, making it potentially subject to a citizen referendum.
That’s if someone runs one.
Speaker Wilson told reporters he believed Utahns might be reluctant to undo a roughly $240 million tax cut.