SALT LAKE CITY — The Utah Legislature’s sweeping tax reform efforts could be wrapped up shortly, state House Speaker Brad Wilson, R-Kaysville, said Wednesday, stopping short of promising a special session of lawmakers is coming.
“We’re thankful tax reform is hopefully getting resolved here in the next few weeks,” Wilson told reporters during a media availability on the Legislature’s November interim day of meetings. He said the latest version of a proposal from the Tax Restructuring and Equalization Task Force should be made public on Friday.
The task force has moved what was its last scheduled meeting from Thursday to Monday.
“I do feel really good that we’re getting close to a place where we’re going to be able to fix our structural imbalance,” the speaker said, referring to the impact of sales tax revenues lagging behind income tax collections on the state budget.
Because the Utah Constitution mandates that income taxes can only be spent on education, GOP legislative leaders see amending the constitution to remove the earmark as key to tax reform and have been negotiating quietly with education leaders to identify a new source of money for schools.
Wilson said Wednesday that solution may not be ready for Monday’s meeting and did not offer any specific proposals other than suggesting the state could create an ongoing public education “rainy day” fund that schools could tap into when the economy dips.
“Assuming we’re able to negotiate and kind of get to a good spot, we’ll have a lot more details sometime within the next week or two,” the speaker said. The goal is to come up with a “more consistent” funding structure for schools that also includes more money coming from local districts.
Separate bills are expected to be drafted to begin the constitutional amendment process, which requires voter approval, and spelling out new funding for schools. Wilson said he would like to see both of those bills go to a special session along with tax reform, but added, “we’re going to do what’s right.”
The task force was created during the 2019 Legislature after legislative leaders pulled a House bill extending sales taxes to most services that was opposed by the business community. The intent was to come up with a new proposal to be dealt with before the start of the 2020 Legislature in January.
Top lawmakers are still holding out hope for a special session in the first week of December, so a reduction in the state income tax rate that’s in the tax reform bill draft could be in place at the start of the new year. Overall, the bill is anticipated to reduce state tax collections by about $75 million.
Wilson said the latest tax reform bill draft will no longer include adding sales taxes to veterinarian care, but will impose them on grooming, boarding and day care for pets. Also off the list of services to be taxed are coin-operated car washes, but discussions are ongoing about whether property repair and maintenance should stay on.
Restoring the full 4.85% state sales tax on food, now taxed at 1.75%, remains in the bill draft, along with a grocery credit of $125 a person that would be available to low- and middle-income Utahns by filling out what Wilson said would be a “very simple” form.
Lifting the sales tax exemption on wholesale gasoline purchases is also still in the bill, expected to add some 12 cents a gallon to the price at the pump on top of state’s gas tax, now about 31 cents a gallon. It’s intended to be in place only until a new source of road funds is identified, but the bill does not include a date for collections to end.