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Herald editorial: After tax fracas, Utah lawmakers must respect voters

By Daily Herald Editorial Board - | Jan 26, 2020

Gov. Gary Herbert and state lawmakers certainly said the right words when they jointly announced Thursday that the Legislature will repeal hastily enacted tax changes in the face of a petition drive that would’ve likely led to a public vote in November.

“We applaud those who have engaged in the civil process and made their voices heard,” the state leaders wrote.

While the words are geared to evoke respect for our democratic process, it belies the general contempt that most Utah lawmakers seem to have for direct democracy. It also partially conceals the pragmatic reason that would’ve made lawmakers’ jobs more difficult in the legislative session starting Monday — trying to budget amid the uncertainty of a referendum that wouldn’t be resolved for over 10 months.

For whatever reason the state Legislature is repealing last month’s tax changes, it’s still a smart move. While a state task force held several public meetings to develop the proposal and argue that it’s prudent to cut income taxes and raise sales taxes, lawmakers certainly didn’t do a good job of explaining their actions after they ramrodded the reforms through in a single-day special session in December.

After the fallout settled, many Utahns realized that the changes appeared to shift more of the state’s tax burden to the low and middle classes, especially by nearly increasing the sales tax on unprepared food purchases from 1.75% to 4.85%. Everyone’s got to eat, but people with lower incomes must dedicate a larger share of their pay to everyday essentials such as food and housing.

Recognizing this concern over food taxes, lawmakers devised an aid for poorer residents in the form of a “grocery tax credit” of $500 per family of four (there’s a $50 per person credit for larger households). However, compared to the simplicity of paying less food sales tax in each transaction, the solution creates a bureaucratic convolution that families must jump through to claim the credit.

Surely, some in the state government were literally banking on the fact that some families won’t take the trouble to determine if they qualify for the credit or won’t complete the form for the credit even if they do qualify. Instead of the state foregoing revenue with a low food sales tax, it collects the money and will only dole out credits if people ask for them.

Some bureaucrats disappointed by the simplicity of Utah’s flat income tax rate must’ve been trying to make up for it with these tax credits. For every dollar a family is above 175% of the federal poverty limit, the credit decreases 0.0035%. Get out your calculators, everyone.

So, it’s back to the drawing board for lawmakers. We hope that they will be more considerate and communicative in their next attempt. If lawmakers pursue changes this year, we would caution them to not use the rush of Utah’s abbreviated legislative session as an excuse to shove through another poorly considered proposal at the last minute.

We also call for lawmakers to truly listen to their constituents. The petition to challenge the tax reform was just the latest cry for change from voters. While state leaders appeared to listen this time (again, most likely for pragmatic reasons), we haven’t forgotten that they generally treat the voters that put them into office with disdain.

In the last election, voters had to approve several reforms that the Legislature failed to move on. Instead of respecting the voters’ will, lawmakers generally did all they could to stymie these changes, including scaling back medical marijuana reform and imposing questionable rules to limit Medicaid expansion and make it more expensive.

Compounding the issue, lawmakers have showed their lack of respect for voters by making it even harder for initiatives to get to the ballot. In addition to changing the threshold of signatures needed for a proposal to make the ballot, the Legislature also pushed back the enactment of voter-approved changes so lawmakers have time to “correct” proposals. We don’t have much confidence in lawmakers to “fix” things, given that new laws or policy changes have sometimes led to the senseless destruction of property at taxpayers’ expense (including controversial condoms and beer that could no longer be sold at state liquor stores).

The initiative process isn’t ideal, but it also represents the will of the entire electorate on a specific issue such as the tax changes. If lawmakers truly represent their constituents, they should respect voters’ decisions instead of continuously searching for ways to undermine them.

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