Utah’s Legislature, governor announce plan to repeal controversial tax reform law
By Bethany Rodgers
4-5 minutes
In a dramatic reversal, Gov. Gary Herbert and the state’s legislative leaders announced Thursday they are repealing the massive and controversial tax reform plan they passed just last month in a special session and have been fiercely defending ever since.
A new Salt Lake Tribune poll shows that 60% of registered Utah voters opposed the tax reform plan and only 25% supported it. Just 15% didn’t have an opinion. The poll, conducted by Suffolk University, surveyed 500 voters from Jan. 18-22. It had a margin of error of plus or minus 4.4 percentage points.
“In recent weeks, it has become clear that many people have strong concerns regarding legislation passed in December to restructure and revise our tax code,” Herbert, Senate President Stuart Adams and House Speaker Brad Wilson said in a joint statement. “They expressed their concerns by signing a petition to include the referendum on the ballot later this year. We applaud those who have engaged in the civic process and made their voices heard. We are not foes on a political battlefield, we are all Utahns committed to getting our tax policy right. That work is just beginning.”
The joint statement laid out plans to repeal the tax bill during the first week of the state’s legislative session, which will begin Monday. Clearing away the beleaguered legislation will allow state lawmakers to prepare the annual budget without the uncertainty of a potential referendum on the state’s existing tax code, the statement continued.
The tax reform plan, while unpopular with the public, had been vocally supported by the Utah Taxpayers Association and the Sutherland Institute, a conservative think tank that had taken out full-page ads endorsing the changes as good for Utahns.
But while state leaders are backing down from the law they passed, they said they have not given up on tax reform altogether.
“Utah has never shrunk from a challenge and, working together, we will chart the right path forward,” they said. “We will take time to reset and address this issue in the future in a way that allows all Utahns to fully understand the challenge we face, engage in the debate over the best solutions and, ultimately, enact policy that best positions Utah for decades to come.”
This is Utah’s second failed attempt in the last year to overhaul the tax code and correct what they argue is a growing budgetary imbalance that could jeopardize critical state programs. Toward the end of the 2019 session, amid an outcry from business interests and lobbyists, lawmakers abandoned a sweeping overhaul package that would’ve imposed sales taxes on a broad array of new service transactions.
The tax package that the task force ultimately presented to the Legislature hiked the sales tax on food and added new taxes to gasoline sales and some previously untaxed services, including pet boarding, Uber and Lyft, car towing and streaming media. Still, the bill passed in last month’s special session would’ve yielded an overall tax cut through an income tax rate reduction, an increase to the per-child dependent exemption and the creation of new tax credits.
Earlier this week, the group declared they’d collected about 152,000 signatures, far exceeding the number they needed to put tax reform to a vote later this year.
Gubernatorial candidates were quick to welcome Thursday’s decision to scrap the unpopular tax bill.
“It is always best to listen to everyday Utahns — not just when threatened with a costly referendum," Republican candidate Aimee Winder Newton said in a prepared statement. "I look forward to the public engaging with our state leaders as they roll up their sleeves, undertake a better process, and apply the feedback we’ve heard from so many Utahns.”
The Salt Lake Tribune will update this story.
