« September 2005 | Main | February 2006 »

November 14, 2005

Taxing Issues

The food tax. Ever since Governor Huntsman said he’d like to repeal the food tax it has become an interesting target to dance around. In last week’s Tax Reform task force the Speaker of the House presented a new idea for repealing the tax. The President of the Senate didn’t want to be upstaged so he presented his own plan, which would cut state revenues by $225 million.

Cutting state revenues is a good idea, but even the Senate president knows that is easier said than done. We all saw how hard it was to cut programs or reallocate budgets during the downturn of 2001. If I remember right we really didn’t cut any programs we just reallocated ongoing money from the Centennial Highway fund and the capital accounts. A couple of cuts we did make in Medicaid continue to surface for one time funding each year. In other words, you won’t make up for the $225 million through budget cuts.

As people have talked about changes in the tax system or cutting taxes I have continued to be skeptical. Many have said they want to make the tax changes for the sake of economic development. Others want to protect the education system so we will have the workforce to attract new business. I believe we are leaving out a greater need that will stop economic development before taxes and education even come into play- Transportation!

It doesn’t matter if you are talking roads or transit, we need to make decisions now about how we will handle our transportation issue. It is huge and only getting bigger. On the conservative side we need a plan to fund, at the least, $500 million dollars per year for at least 10 years. I worry that too many legislators are trying to forget this issue because it is so big. If there is a way to reallocate the food tax revenue we shouldn’t be cutting that tax. Instead we should make the reallocations so we can fund transportation expansion. I’ve always felt we would be foolish to cut taxes and then have to raise them again when we finally decide we need to fund transportation.

Last year the House presented an idea to earmark sales tax revenues from automobile related sales to help fund transportation needs. The Governor didn’t want to have anything to do with it. Instead, his budget director wanted to protect those revenues to grow other state programs. If we can’t make a commitment to reallocate these funds for transportation then how is the President of the Senate going to reallocate just to get rid of the food tax?

The Legislature must get serious about the transportation issue now. We cannot keep putting this off hoping a future Legislature will handle the issue. Solving the transportation issue now is an important key to our State having a strong economy.

Posted by Jeff at 02:37 PM | Comments (4)