Gibson Hillyard

Utah Rep. Francis Gibson, left, and Utah Sen. Lyle Hillyard, center, before the start of an open house of the Tax Restructuring and Equalization Task Force on Monday, July 8, 2019, at the Davis Conference Center in Layton. They co-chair the task force, which is investigating possible reforms to the state's tax structure. Alex Janak, a policy analyst for the task force, is on the right.

A mix of seemingly contradictory messages are emerging as a special legislative task force continues the delicate debate over a possible overhaul of the state’s system of taxation.

Utah Sen. Lyle Hillyard, for one, hopes for a “revenue neutral” solution, a fix that maintains the current state funding level, but shifts where it comes from and how it’s allocated to meet the state’s changing needs. The Logan Republican is co-chair of the Tax Restructuring and Equalization Task Force.

“We don’t need more money. We just need more flexibility,” Hillyard said.

Utah Rep. Francis Gibson, the other co-chair and a Republican from Mapleton, takes a slightly different view. He would like to see an income tax cut and a net reduction in taxes collected by the state. “All along we have said we don’t have a money problem. We have a distribution problem,” he said.

One of the seeming objectives of task force members, says Matthew Weinstein, who has followed the debate as state priorities partnership director for Voices for Utah Children, is to reduce taxes Utah collects by $75 million. But his group, a nonprofit that advocates for children, offers a dramatically different approach to things, suggesting that lawmakers instead consider tax hikes.

A Voices for Utah Children report released Tuesday in response to the task force’s ongoing efforts cites “chronic public revenue shortages.” It also expresses concern about the specter of ending the provision in the Utah Constitution earmarking state income tax money for education, among the topics state lawmakers on the body are reviewing.

“Alas, the unfortunate truth is that, after many years of tax cutting, Utah finds ourselves unable to keep up with the needs of a fast-growing state,” the report reads. The group doesn’t offer any specific tax hike possibilities. But it warns of lagging state funding for education and says cutting the income tax rate will exacerbate what it sees as the state’s money woes.

The task force held several public meetings around the state in June and July to gather public input and spread the word of its efforts.

Its formation was spurred, in part, by a controversial proposal during the legislative session earlier this year — House Bill 441, ultimately shot down — that would have created new sales taxes on a range of services. The bigger issue, though, according to task force members, is the shifting source of money entering Utah coffers. Income tax revenue, earmarked for education, grows and grows, while sales tax funds, used for transportation, public safety and a slew of other services, increases, but at a slower rate. That dynamic, task force representatives say, creates an imbalance in funding and, over the long haul, threatens the revenue allocated for government offerings reliant on sales taxes.

The task force has met twice at the Utah State Capitol since the meetings around the state, with a third meeting set for Sept. 26 and another scheduled for Oct. 10, both in Salt Lake City. Whatever the case, whether recommendations ultimately emerge and, if so, what they may entail, remains up for debate.

“I would hope,” Hillyard said, when asked about the prospects that the task force reaches consensus on proposed change. “I have no idea.”

Gibson thinks the task force has time to pull together a proposal and still have a special session on the issue before year’s end. “It all depends on political will,” he said.


The task force has discussed a range of thorny subjects — whether to raise the state sales tax on food, the income tax earmark for education, reducing income taxes and more.

Hillyard said the body will also be looking at the tax exemptions spelled out in state law. “Are they really working? Who are they for?” he said.

Legislative staffers, Hillyard added, have identified a series of taxes on services common in other states but absent in Utah. Those, too, will be discussed, though Gibson said the range of services to face scrutiny by lawmakers is smaller than what had been contemplated in HB 441.

Though specific recommendations have yet to emerge, one point both Hillyard and Gibson singled out was the source of income and sales taxes in the state. Only Utahns pay income tax, by and large, while a notable slice of sales taxes — 16%, Hillyard said — comes from visitors to Utah. That, in Gibson’s mind, bodes for a cut in income taxes since all Utahns would benefit with more money left in their pockets.

Reducing sales taxes, by contrast, cuts the level of funding coming from the non-Utahns making purchases here. “Why would we do that?” Gibson said.

Notwithstanding the talk of reducing the income tax, earmarked for education, neither Hillyard nor Gibson indicated cause for nervousness among education advocates. Hillyard, for his part, has never witnessed a concerted push among Utah lawmakers to cut education funding, he said.

“I would say no, (education advocates) should not fear. We have been committed to it,” said Gibson.

Still, Weinstein wonders how education could benefit if the income tax were cut or if the constitutional provision earmarking state income tax revenue for education were eliminated. In advocating for new taxes, he paints it as a matter of taking a long-term view, laying the groundwork now via the new funding to benefit future generations of Utahns, particularly in light of strong population growth. He views tax cuts, by contrast, as an easy out for political leaders, a way to curry favor.

“Politicians always want to cut taxes. It’s sort of that instant gratification. It’s sort of like the junk food of politicians and the public certainly likes it as well,” Weinstein said.

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