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Rich Piatt (KSL) discussed the most recent budget figures with Utah's legislative leaders.

Video Courtesy of KSL.com

2 Comments:

 Anonymous said...

Pardon my naivete, but I would like someone to explain to me what effect the tax system change has had on the budget. Of course I realize that macroeconomics play a big role. However, I distinctly remember several lawmakers making the point that the reform would be "revenue-neutral." I get the feeling that is not exactly turning out to be true.

9/18/2009 2:35 PM  

 Lyle Hillyard said...

Anonymous,

You present an interesting point.

First, we are looking at the cash flow. The revenues dropped so much because of the drop in the economy as a whole, that we do not have a good base to compare this year's collections (the first year with the new tax rate), with last year's. The State Tax Commission under-withheld taxes during the year, which made comparisons to previous years more difficult. I understand that the problem has been corrected but we are watching it closely.

Second, Gov. Huntsman really pushed the change in tax rate and argued that when businesses saw that our top income tax rate was only 5%, it would attract new businesses here. He figured that what income tax, if any, we lost would be made up with the growth in jobs, which is very hard to measure in the short term. But keep watching. We have a lot of work to do in the upcoming session.

Senator Hillyard

9/18/2009 4:58 PM  

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