Legislature looks at tax increases to balance budget shortfall

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SALT LAKE CITY -- Utah lawmakers are counting on federal stimulus money to bail out the state's budget. Even so, legislators are whispering two forbidden words behind the scenes: tax increase.

Nothing is set in stone yet, but there is serious talk about different ways to raise more money. Some of these ideas are familiar and some of them are not.

The most prominent of those is the talk of a tobacco tax, potentially raising $26 million next year if the current proposal is passed.

But a lot of people don't realize that lawmakers are also talking about raising vehicle registration fees by about $20 a year. Fees could also go up for certain hunting and fishing licenses, and court-imposed fines might go up. There is even a proposal to re-impose the sales tax on food, doubling it to 6 percent.

All these together could potentially raise about $585 million a year. But there is a sticky question being raised in the halls of the Capitol: Is now the right time to raise any taxes?

"The neighbors, the taxpayers I talk to, they do not want, they will not tolerate another tax increase. Times are tough. They're tightening their belts. They expect government to do the same," said Royce Van Tassel, vice president of the Utah Taxpayers Association.

The problem, according to legislators, is that the cost of running state government itself is rising. They're finding ways to balance the budget and fund other programs, like health care, that really can't be cut. They see some of these proposals as merely ideas to doing something different.

In addition, there are proposals in the works that would give cities the power to raise certain kinds of taxes.

For example, House Bill 439 would allow all Utah cities, and voters, to raise taxes for parks, the arts and zoos.

There are even whispers that raising the gasoline tax is on the table, but lawmakers are aware of how politically unpopular that is.

All of this is happening while the state is still uncertain about the federal stimulus money coming in. That issue is keeping the whole budget picture murky, at least for now.

E-mail: rpiatt@ksl.com

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