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ST. GEORGE — Utah’s six Republican candidates for governor appeared together for the first time Thursday, generally agreeing on tax reform and other issues raised during a panel discussion at St. George Area Economic Development’s annual conference.
All of the candidates seeking to succeed GOP Gov. Gary Herbert, who is not running for reelection after holding the office for more than a decade, expressed concerns about the tax reform package passed in a special legislative session last month that’s now subject to a citizens referendum aimed at putting repeal on the November ballot.
That referendum gained momentum later Thursday when the Harmons grocery chain announced its support.
Referendum volunteers will begin collecting voter signatures on the referendum in Harmons’ 19 stores in Utah Saturday and continue through Jan. 21, the deadline for turning in the nearly 116,000 signatures needed statewide. Already, backers of the referendum say more than 15,000 signatures have been collected.
If the required number of signatures from at least 15 of the state’s 29 counties can be verified, the increase in the sales tax on food from 1.75% to the full 4.85% state rate set to take effect on April 1, along with the rest of the tax reform package, would be put on hold until voters have their say.
“Food is essential and should be affordable,” Harmons Chairman Bob Harmon said. “Increasing the tax on food hurts everyone, but especially those in our community who are already struggling. As a company, we do not believe groceries should be taxed. We feel strongly that Utahns should have an opportunity to vote on the issue before the tax goes into effect.”
The tax reform package, signed into law by Herbert, also raises sales taxes on gas and some services, as well as reduces income taxes through a rate cut from 4.95% to 4.66% and new tax breaks aimed at families, the poor and the elderly. The goal is to offset lagging sales tax revenues caused by a shift in spending from goods to services.
Herbert’s office said he had not been contacted about the grocery chain’s concerns and said the decision to assist with the referendum should be reconsidered.
“We are disappointed in Harmons’ actions to allow signature gathering to repeal the recently enacted tax modernization package at their stores. As a corporate citizen in the state, they have a right to engage in the political process, but they also have the responsibility to do so in a way that elevates the public’s discourse and is based on facts and not emotion,” a statement issued by the governor’s office said.
The statement also said that had Harmons officials taken the time to meet with the governor or legislative leaders, they would understand why it is needed. “The consequences of repealing the tax bill would severely impact the employees of Harmons as well as their low- and middle-income customers. We urge them to rethink their ill-advised decision.”
During the panel discussion by the Republicans vying to replace Herbert, his lieutenant governor, Spencer Cox, cited the increased sales tax on food as the No. 1 reason he’s against tax reform. Cox has not taken a position on the referendum because his office oversees elections.
“We do have a challenge in this state, a structural challenge. However, I do oppose the tax reform, as did many on this stage,” he said, adding that there were some “good things” in the tax reform package, including eliminating the income tax on Social Security benefits for some Utahns.
Cox said as governor, he would have looked first for ways to cut government spending, just as he did as a Sanpete County commissioner when pressured to raise taxes during the recession. That, the lieutenant governor said, should “always be our first priority.”
Businessman Jeff Burningham said state spending has increased some 30% over the past five years and called the budget imbalance “a complex and nuanced problem. But we do not have a revenue problem in this state.” Instead, he said, the problem is with spending, perpetuated by “politically entangled leadership.”
Former Gov. Jon Huntsman Jr., running for what would be his third term after leaving office in 2005 to become U.S. ambassador to China under then-President Barack Obama, and later, U.S. ambassador to Russia under President Donald Trump, questioned the tax reform process that relied on a legislative task force.
“The governor is there to lead, to use the bully pulpit,” Huntsman said, citing his experience heading the state’s last major tax reform effort that created a single, lower state income tax rate and reduced the state sales tax on food. That effort took two years to get done “because we brought the public in the process” and gave them ownership.
Former Utah House Speaker Greg Hughes, who publicly entered the race Wednesday, said he’d tried to tell lawmakers that “from out here in the cheap seats it isn’t well understood what you’re trying to do” and that the governor needed to be a stronger advocate.
“If you don’t have a governor that’s doing it and this whole thing is called the legislative tax reform, the public will never be OK with something (for which) I don’t think there’s enough information or the bully pulpit to explain it,” Hughes said. “That is the inherent problem with that tax reform.”
Salt Lake County Councilwoman Aimee Winder Newton, who has collected referendum signatures, said that “when you come out as the Legislature and say that you have lowered taxes and you have this many people angry about it, that tells you that our governor did not help people along and I am frustrated by that.”
Thomas Wright, a former Utah GOP chairman and businessman, said Utahns have heard for a decade this is the nation’s best-managed state, but “then suddenly we were told this year we have all these intractable problems in our tax code.” He said there should instead be incremental changes “that people can understand.”
The conference, held at the Dixie Convention Center, dealt with the growth issues facing southern Utah. That was also the focus of the questioning of the gubernatorial candidates by the moderator of the panel discussion, Natalie Gochnour, director of the University of Utah’s Kem C. Gardner Policy Institute.
There was agreement on going forward with the Lake Powell pipeline to bring water to the area, as well as with encouraging alternatives to a traditional four-year college degree that embrace technology and other training for a diversified workforce.
The congenial tone of the panel discussion was noted by Hughes in his closing statement.
“I want you to see what’s just happened here,” he told the conference audience, describing himself as “so happy in a time in the nation right now when people talk past other and there’s so much argument, so much venom, you’re going to see people make their best case.”