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Controversial Utah tax reform bill to be repealed

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Controversial Utah tax reform bill to be repealed

By Jacob Klopfenstein, KSL.com | Updated - Jan. 23, 2020 at 12:25 p.m. | Posted - Jan. 23, 2020 at 9:19 a.m.



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SALT LAKE CITY — Utah legislators will fully repeal a controversial tax reform bill. The announcement comes just days after critics of the bill finished collecting thousands of signatures to oppose it.

Gov. Gary Herbert, House Speaker Brad Wilson and Senate President Stuart Adams announced Thursday morning the bill, SB2001, would be repealed.

"The original challenge we worked to address lies before us still," Herbert, Adams and Wilson said Thursday in a joint statement. "Crafting the right policy is critical to our state’s long-term success. Utah has never shrunk from a challenge and, working together, we will chart the right path forward. 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."

Lawmakers will introduce legislation Monday, when the 2020 general session of the Utah Legislature begins, that will repeal the tax code changes, the release said. SB2001 enacted changes to the tax code in December during a special legislative session.

State leaders intend to have the repeal bill ready for Herbert to sign into law before the first week of the legislative session ends, the release said.

Proponents of the bill argued it would save taxpayers money, but critics derided its proposed tax hikes on items such as food and gasoline.

Opponents of the bill sought to put the tax code changes to a vote in the form of a referendum on the November election ballot. Wednesday, organizers said they had collected 152,000 signatures from across the state, which would have been enough to get the referendum on the ballot.

A potential referendum would have added some uncertainty next week for lawmakers drafting the state's budget for the 2021 fiscal year, Herbert, Adams and Wilson said in the release. Repealing the law will "enable the legislature to draft the budget without the uncertainty of a referendum potentially changing the tax code midway through the budget year," they said.

Herbert, Adams and Wilson also commended people who engaged in the civic process on the topic.

"We are elected to represent our constituents by understanding the issues we face as a state, debating proposed solutions and adopting the right policies," they said. "We are encouraged by the high level of interest in this issue and we hope those who signed their names to the petition — and all Utahns — will be engaged as we work together to craft the right policy."

Herbert discussed the announcement further during his monthly news conference on PBS Utah on Thursday morning.

Herbert, who is not running for reelection this year, invited the current gubernatorial candidates to show the public their own proposals for tax reform.

"It’s time for them to step up and let the public know: What are your ideas on tax reform? How are you going to address the new modern economy? And what are your proposals for tax reform?" Herbert said. "I think the public deserves to hear what their ideas and thoughts are in that regard, and so I would hope that they would, in fact, engage in this conversation as they campaign for this great office of governor."

Several Republican candidates for governor reacted Thursday to the news of the bill being repealed.

Former Gov. Jon Huntsman Jr. applauded the decision.

"If elected to serve again, I look forward to working with the legislature, the public and community advocates to improve our tax policy that broadens the base, lowers the rate and not only keeps us competitive with other states, but puts us in an advantageous position to keep Utah as the strongest economy in the nation," Huntsman said in a news release.

Businessman Jeff Burningham also supported the decision to repeal the bill.

"The people of Utah have sent a strong message to the legislature and governor’s office that they do not want this tax bill. This is Utah grassroots at its best," Burningham said in a news release. "This gives me such joy. It’s a huge victory for the people."

Salt Lake County Councilwoman Aimee Winder Newton, also running for governor, announced she supports the bill's repeal.

"I am very pleased that Gov. Herbert and legislative leadership have decided to overturn the controversial tax bill that was overwhelmingly rejected by Utahns," she said on Twitter. "It is always best to listen to everyday Utahns — not just when threatened with a costly referendum. 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."

Lt. Gov. Spencer Cox, who is also a gubernatorial candidate, said he had concerns about the bill from the beginning of the process.

"There was a big tax decrease that nobody was asking for, and then there were these tax increases that nobody wanted," he told KSL NewsRadio Thursday. "So you get this combination that made people angry. ... One of the rare times we've seen the far right and the far left come together on an issue. That doesn't happen very often."

Cox added that the issues the legislature sought to solve with the tax bill are about two years away from becoming much more serious issues. He commended the legislature for taking the initiative to try and get something done.

Herbert said the sales tax increase for food was the "catalyst" that led to the strong opposition to the tax bill. Even though the bill would have netted an overall tax cut of $160 million, lawmakers didn't communicate that well enough, the governor added.

"The fact that we have pushed back means we’ve not done our job, as far as convincing the people this is the right thing to do or the right way to do it, maybe all of the above," he said.

The bill also would have given one-time rebates to some low-income families as a means of offsetting the food tax hike, Herbert said. Even though that was included in the bill, its opponents insisted it would adversely affect the poor, the governor said.

"The belief that somehow we were going to hurt the poor became the rallying cry," he said. "There were aspects of it that were good, not understood, and we didn’t do a good job of explaining."

Contributing: Dave Noriega and Debbie Dujanovic, KSL NewsRadio

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