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Tax cut? The Utah State Legislature contemplates budget after citizen referendum

Posted at 4:18 PM, Feb 20, 2020
and last updated 2020-02-20 19:35:06-05

SALT LAKE CITY — Utah lawmakers are now figuring out how to spend millions after receiving the latest budget numbers.

The latest figures released Thursday show Utah has ongoing money into its general fund (paid for by sales taxes) at about $92 million. There are also $38 million in one-time funds. The education fund (paid for by income tax) is up $77 million in ongoing funds for a total of $518 million. One-time money for that is up to $323 million.

"The economy in Utah is doing very well and we continue to have the same challenge we’ve always had," said Rep. Brad Last, R-Hurricane.

Those challenges were motivation for Republican lawmakers to push a tax overhaul bill that offered a $160 million income tax cut, while hiking some sales taxes for things like food, gas and some services. GOP leadership on Utah's Capitol Hill argued it addressed an imbalance with sales taxes declining while income taxes continued to rise.

But the tax reform effort imploded when a citizen referendum forced lawmakers to retreat and repeal their own bill. On Thursday, House and Senate leadership insisted those problems still existed.

"We’ve got some real issues here," said Sen. Jerry Stevenson, R-Layton, who oversees the budget.

Referendum backers continue to watch lawmakers to ensure they don't try to push through tax bills without a thorough vetting, said Judy Weeks-Rohner, a referendum sponsor.

"We have people up here watching every single day," she said.

But without their tax reform plans, lawmakers now must figure out how to spend almost a billion dollars (with the bulk of that tied up in education funds). Appropriations requests for programs from wildlife to air quality and roads to homelessness will have to be prioritized, said House Speaker Brad Wilson, R-Kaysville.

The Speaker also would not rule out an income tax cut. There's about $80 million set aside for that.

"I think there’s a lot of members in both chambers as well as the public that would rather us give some tax relief if we can," he told reporters.

But Senate President J. Stuart Adams wasn't sure if that was a good idea in the face of so many spending requests and issues the state is facing.

"I think it would be nice, but I believe we need to manage our affairs," he said at his daily news conference.

Meanwhile, a coalition of advocacy groups are calling on the Utah State Legislature to not offer a tax cut. Instead, they said Utah should spend the money on programs that residents say they want.

"This is not a time for legislators to be thinking about a tax cut. This is a time for legislators to be working to solve those problems that are created by growth," said Deeda Seed with the Center for Biological Diversity.

The groups, which included Voices for Utah Children, the Catholic Diocese of Salt Lake City, the Utah Education Association and Utah Physicians for a Healthy Environment, said Utah is experiencing good economic times and should fund the things that can make the state better.

"Rather than cutting taxes, we should be building futures," said Heidi Matthews, the president of the UEA.