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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 November 14, 2005 02:37 PM
Comments
Jeff
I couldn't agree with you more. In fact I woudl take it a step further. Where do the legislators think the cities who are totally dependant on the sales tax from food going to get the funds to pay for the services we provide. Cedar Hills for instance is in the process of developing our commercial center & we are counting on it to help move us out of potential financial difficulty looming ahead as we experiance rapid growth. Our main commercial tenant will be a grocer. If the legislature proceeds with this plan then they had better develop a plan to replace the funds they take from the cities otherwise they are only stealing & trying to dodge the obligation to explain why property & other taxes must be raised. My city council & I & I expect other mayors & city councils will not sit by & just allow this to happen. Please feel free to call me at 472-6228 you know me & I know you. I have ideas as to how to regressive nature of food tax can be addressed for the poor & yet still maintain most of all of the tax base generated therein. I appreciate what you & others do Jeff & I can certainly appreciate how time consuming it is kepp up the good work & I look nforward to hearing from you.
Posted by: Mayor McGee at November 15, 2005 07:47 AM
Good Job Jeff. The Transportation Fund has been to small for many years. Nor has it grown like the Uniform School Fund. Since the Uniform School Fund is restricted you must have the growth in the General fund or the Transportation fund. You cannot afford to give up funds from the General fund (sales Tax). I agree we need the funding for transportation improvements and growth.
Good Luck
Posted by: Lee Stephens at November 15, 2005 08:19 AM
dear Jeff, If a Republican legislature can't cut taxes and reduce govenmen who can? I support the road work, but wish it were less. No new programs please. The education is a bottomless pitt and what we need are a few private schools to give competition.
Posted by: robert j. petersen at February 1, 2006 10:35 AM
If the food tax is not totally repealed at the cash register, I will vote against all incumbants that represent my area irrespective of where they stand on other issues.-Dave Decker(Provo 84604)
Posted by: David S Decker at February 22, 2006 05:06 PM