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Deal may be struck on food sales tax, education funding earmark

Posted at 4:31 PM, Feb 09, 2023

SALT LAKE CITY — A group of demonstrators showed up carrying baskets of bread and cookies for lawmakers, trying to persuade them to eliminate the state portion of the sales tax on food.

FOX 13 News has learned discussions are under way to do it — but only if a proposed constitutional amendment goes before voters to remove the earmark on education and social services on the income tax.

"In order for us to remove the sales tax on food we need to free up the earmark in the income tax fund to be able to do that. And we are in discussions on that right now," House Majority Leader Mike Schultz, R-Hooper, said in an interview Thursday with FOX 13 News.

The protesters, who included clergy and people who say they've been hurt by rising food prices, say eliminating the state portion of the food tax is necessary.

"After the pandemic and a lot of things we lost income and a lot of resources to help us out. I think it can help reduce costs for families in Utah," said Carlos Samoya.

The bills by Rep. Rosemary Lesser, D-Ogden, and Rep. Judy Weeks-Rohner, R-West Valley City, have been stalled for years now. But both lawmakers, who met with their supporters outside the House chamber on Thursday, said they sense there is new movement.

"Since leadership has already said this is the year of the tax cut, we’re here to say we have a great idea for one of the tax cuts," Rep. Lesser said.

The discussion is "on the table," Senate Republican leaders have repeatedly said. But Senate Majority Whip Ann Millner, R-Ogden, said they do need to address volatility in sales tax funds (which pay for general government services) and the income tax, which covers education and social services.

"Income tax has grown ten times the rate of the general fund, and if you take the sales tax off of food the problem we create is we have lots of other needs in government," she told reporters on Thursday.

So a deal is being discussed among legislative leaders and education stakeholder groups about a proposed constitutional amendment that would remove the earmark on the income tax. If approved, it would go before voters in 2024. Many education groups would only agree to support an amendment if there were promises that public schools would get increases in funding.

The Utah Education Association, the state's largest teachers union, confirmed to FOX 13 News it has been involved in talks. However, the union has taken no position on the idea yet.

"We hope to get it passed and let it go to the public to be able to make that decision," Rep. Schultz said.

Asked by FOX 13 News if it was possible to see a proposed constitutional amendment by the end of this legislative session, the House Majority Leader replied: "Yeah, I think it is. It’s absolutely possible."

Complicating things further is overall discussions on income tax cuts and other tax reductions in a robust economy in Utah. Asked where they are on those discussions, Senate budget chief Jerry Stevenson, R-Layton, replied: "There are a lot of negotiation that you have to do sometimes to get to a certain place and the very last place you want to do that is in the media."

Rep. Weeks-Rohner said she hoped lawmakers would listen to the people who want the sales tax on food removed.

"Look at these people, they want the removal of the food tax," she said. "That’s what we need to do. It’s imperative."

Gina Cornia with Utahns Against Hunger, who has long advocated for the food tax to go and sponsored a citizen referendum on a tax package the legislature passed in 2019, said this time she might favor an overarching tax deal.

"Hopefully, a package this time includes tax cuts and removing the sales tax on food," she said. "Hopefully, people will find that more palatable."