By John L. Valentine
President of the Utah Senate
Each year the Utah House and Senate wrestle with balancing multi-billion dollar budgets to meet the needs of our state. Like most families in the state, we make tough choices on what we can and cannot afford. Many of those decisions are heartbreaking.
We are also charged with maintaining a tax code that provides sufficient funding without overburdening citizens. It’s not easy work, but most legislators bring unique, helpful expertise and consider the responsibility an honor.
What we don’t have is the dubious luxury of obsession over a few points of the tax code as if they were the solitary measure of prudent policy. We have to view the budget panorama in its entirety, and make decisions based on the big picture.
In an editorial last Sunday [10/16/05]
, the Daily Herald waxed indignant over the fact that the Legislature’s Tax Reform Task Force recommended against adding a tax to professional services and will probably keep the sales tax on food.
It’s true that Utah taxes food. We spend millions of dollars advertising the beauties of Utah to attract visitors. Visitors buy groceries. This generates a significant source of income for the state. Moab, for example, has no need for a property tax. The tax on food - almost all of it from tourists - funds what they need to run their city.
However, it is also a fact that a tax on food may create an unfairly heavy tax burden on the poor, because the grocery budget makes up a larger percentage of their income.
I believe there is a solution to this dilemma. I strongly favor a tax credit that refunds the amount low income families spend on grocery sales tax.
This proposal was suggested by Utah Issues, a low income advocacy group, and I think it is a good, solid solution. The sales tax on food is only considered regressive because of its impact on people with low income. A grocery tax refund focuses tax relief where we need it most.
Combine this proposal with Governor Huntsman’s recommendation of a $12,000 joint filing exemption and a $4,000 per person personal exemption, and you have a workable tax reform proposal that would provide adequate funding without harming the poorest and most vulnerable among us.
We also scrutinized taxing a broader range of services. Although intelligent people disagree on this issue, our judgment was there were too many fatal complications inherent in that proposal. One difficulty was drawing clear lines between what is and isn’t a business transaction. Another was that medical, hospital and dental services would comprise over 60 percent of the new tax under this proposal. In light of the value of these services, we didn’t feel like this was a good policy choice. Florida recently expanded their tax into services but recognized the swamp into which they had stepped and retracted that tax a year later.
If you are looking for a new way to share the tax burden, you have to look at the tax system in its totality. Focusing on a few small pieces and ignoring the big picture doesn’t make for good policy decisions.
The Daily Herald Editorial last Sunday opined it is “still theoretically possible to do the right thing.” Then they said, “We’re not holding our breath,” as if they understood fully the motivations and thoughts of your elected representatives. Major proposals are on the table and we are all working diligently and sincerely to do our best to make decisions that are smart, equitable, and effective for the state of Utah.
Our state is recognized as one of the best financially managed states in the nation. We are sincerely committed to responsible fiscal management, while encouraging the kind of society and economy in which we want to live (stable homes, healthy economy, thriving religious and charitable community, etc.).
The Tax Reform Task Force is considering major changes to the Utah Tax Code. We will be taking citizen input in Provo, on Oct 26, at 6:00 p.m., at Dixon Middle School (750 West 200 North). Please visit www.senatesite.com for more information.
We encourage all to attend.
[This op-ed piece was written for and published in yesterday’s Daily Herald