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Wednesday, May 17, 2006

Measure twice, cut once

By Dan Eastman
Senate Majority Whip

Problems with the new bifurcated system for tax on food are multiplying.

A few examples:

  • The negative impact on retailers, especially mom and pop shops in rural Utah;

  • The escalating cost of compensation for retailers forced to retool their systems;

  • Lack of comprehensible definition of what is and is not “food”;

  • Unclear policy on the bundling of “food” with non food items;

  • Shaken confidence in the numbers to the point we don’t know the price tag is really $70 million;

  • A higher price tag would damage transportation, health and human services, and other General Fund priorities;

  • We don’t know the extent of all the negative impacts. Unforeseen problems continue to come out of the woodwork.
This is poor policy and we should have known better. After some careful discussion in caucus today, the Senate Majority voted in support of a six-month delay (giving the new bifurcated food tax policy a start date of July 1st).

This will give us time to clarify the fiscal note and to start fixing the unintended impacts and consequences.

Why hurt people when we don’t have to? Why rush into a poorly-thought-out policy decision when we are not ready to mitigate the damage?


Blogger The Senate Site said...

Representative Ferry is working on a bill that will fix some of these problems. That’s probably necessary, but it’s a piecemeal solution. A better plan would be to delay enactment until we can undo the damage.

We’d like to see the delay on the call for a Special Session.

5/17/2006 7:01 PM  
Blogger steve u. said...

This seems a bit late and overblown. But, maybe some more details would help.

Your first two points appear to restate the same issue -- retailers would be impacted. Were Rep. Ferry's bill to pass, what would those remaining impacts be? And, if tax relief is not delayed as you're advocating, should we even bother with Rep. Ferry's bill since the Senate seems to argue that it doesn't get the job done?

Your next two points also appear to restate the same issue -- difficulties in distinguishing food/non-food items. What exactly are those difficulties that you think can't be worked out by January 1?

Your next two points again appear to restate the same issue -- that the fiscal impact could be higher than was anticipated. How much higher?

Your last point is simply the truism that we don't know what we don't know.

So, it looks like 3 issues might be "coming out of the woodwork." Before we deny taxpayers 70 million dollars in tax relief each and every year (or $35 million, if we delay it 6 months), it might make better sense to analyze the nature and scope of those issues. We have plenty of time to do that.

The issues weren't significant enough to even warrant discussion of a delay in all-day leadership meetings on Tuesday. To sound the alarm bells the next day for immediate action (which would have the effect of lifting another $35 million from taxpayers) -- when the provisions won't go into effect for another 7 months -- seems less like measuring twice and cutting once than it does flopping around with scissors.

In any event, it's nice that you have the blog so that we can discuss these issues.

5/17/2006 11:02 PM  
Anonymous Anonymous said...

Why does the Utah Senate want to deny citizens the right to buy the necessities of life without having to pay a tax.

You could probably make quite a bundle on oxygen?

5/18/2006 10:00 AM  
Anonymous Interested Bystander said...

KCPW: Other Tax Commission Figures Now in Question

May 17, 2006 by Julie Rose

State Lawmakers Challenge Accuracy of Fiscal Notes

(KCPW News) A calculation error now indicates the Governor's flat tax proposal would cost more than double the original estimate. The Utah State Tax Commission is shouldering the blame for the math flub, but state lawmakers are now squeamish about the validity of other fiscal notes prepared by the commission.
During a legislative committee Wednesday, Representative Becky Lockhart pointedly asked Commissioner Pam Hendrickson what assurance she has that so-called fiscal notes prepared by the commission to estimate the cost of other bills are accurate. Hendrickson tried to assure lawmakers she is fixing the problems that led to the errors.

Since lawmakers often disagree with cost estimates placed on their proposed measures, the new-found errors in the tax proposal are likely to encourage challenges of fiscal notes on future bills. When the State Legislature meets in special session next week, it plans to pass a measure that will allow staff from the Legislature and Governor's office to double-check analysis produced by the State Tax Commission.

Posted in KCPW Newsroom and Legislative Coverage. Copyright 2006 KCPW

5/18/2006 1:32 PM  
Anonymous Demosthenes said...

Senator Eastman, thank you for taking the time to explain your position. This tax policy is no doubt very complicated and it seems the Senate is taking the responsible approach. Thank you for taking the time to make sure the decisions the legislature will make are the correct ones. It is nice to know that at least one body of the Legislature is actually concerned more about governing than cheap bumper sticker politics.

Additionally, it is encouraging to know that the Senate has a place like this website where we have such great access to our elected officials.

The Senate Site exemplifies the tenets of true democracy, as the public are permitted (if not encouraged) to make comments and ask questions directly to their Senators.

The other day, I was on the Hill for interim and went into the House Majority Caucus. One Representative stated to his colleagues that, currently, the Senate is clearly communicating more often and more efficiently to the public than the House. The Caucus then engaged in a discussion of building a blog similar to the Senate Site. This site should be commended for its innovative communications to the public. Congratulations and many thanks.

5/19/2006 10:04 AM  
Anonymous A Legislative Advocate said...


The Senate Site is great but I wish I could walk into the Senate majority caucus. It is closed to the public while the House keeps theirs open to the public and press.

5/19/2006 12:20 PM  
Blogger The Senate Site said...

SteveU comes by his frustration honestly. He has skin in this game – and deserves credit for being one of the prime movers and architects of this tax cut.

We respect him as a capable legislator and understand where some of his frustration is coming from, but can still disagree from time to time over principles of sound tax policy.

I believe Senator Hillyard is double-checking some numbers and plans to add a few words re: holding off on this new policy until we can get our ducks in a row.

5/22/2006 12:28 AM  
Blogger steve u. said...

Thank you. We absolutely can (and at times should) disagree. I hope I never get in the way of obtaining accurate facts and information. If there is new and significant information to consider on this item, let's take a look.

I just don't want to drag out old carcasses for the sheer fun of it. As you are well aware, this was a particularly unpleasant experience for the actors involved -- as it can be when the ship is suddenly turned in one direction or the other. We all have the fresh wounds to prove it. If this is a continuation of the policy battle (as contrasted with actual problems), I think we should move on to the next challenge.

We'll talk.

Apologies if my tone was too snarky. I respect the Lords and, especially, my counterpart in that body. Just maybe let a little more air into the room when you caucus.

See you on Wednesday.

5/22/2006 2:52 PM  

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