Utah's poor aren't a revenue stream for state lawmakers — yet, anyway

Tuesday , March 07, 2017 - 5:00 AM

STANDARD-EXAMINER EDITORIAL BOARD

State lawmakers decided Monday to scrap a proposed sales tax increase on food.

They ran out of time.

  • RELATED: “The Latest: Bill raising food sales tax dies before launch”

Utah’s poor caught a break. But as close as Republican leaders came to succeeding this time, they’ll return with a similar proposal in 2018.

We can’t allow the next Legislature to use Utah’s poor as a revenue stream.

In a recession, lawmakers say, sales tax revenue can fluctuate. That forces the state to either cut spending or find new revenue sources.

The Great Recession started in December 2007 and ended in June 2009, according to the Federal Reserve. The following year, Utah’s total net revenue dipped to $6.1 billion. Then it started growing, the Utah State Tax Commission reports, reaching $8.7 billion in 2016.

Similarly, the state’s sales and use tax revenue collapsed to $1.4 billion in 2009. By 2016, it had increased to $1.78 billion.

Utah’s net revenue increased 43.3 percent between 2010 and 2016. During that same six years, sales and use tax revenue increased 26.7 percent.

Yet Senate President Wayne Niederhauser, a Sandy Republican, insisted the state needs to increase its sales tax on food in order to provide a consistent source of revenue for social services in case of an economic downturn.

Actually, no. The last thing Utah needs is a Legislature that views the poorest of the poor as a new revenue stream.

Because that’s what this was about, pure and simple — enhancing revenue.

In 2006, Utah lowered its sales tax on food from 4.75 percent to 1.75 percent. Niederhauser wants his money back.

And to show he wasn’t singling out the poor, he offered to lower the state’s overall sales tax rate to 4.4 percent. On everything.

Including food.

Sales taxes are regressive. They disproportionately affect those with the lowest incomes.

A family making $100,000 a year can afford an increase from 1.75 percent to 4.75 percent in the sales tax on unprepared food. A family living below the poverty line — $24,300 for a family of four — can’t. Not without making brutal choices about who eats and how often.

And all because Niederhauser and the state’s legislative leaders don’t want to make tough decisions about state spending.

In the case of a recession.

In a state with one of the hottest economies in the U.S.

Where net revenues increased by $363 million between 2015 and 2016.

In 2012, Utah enacted the Intergenerational Poverty Mitigation Act. Its goal is to break the cycle of poverty, which leaves generation after generation of Utahns dependent on government assistance.

According to a 2016 state report, 57,602 children live in intergenerational poverty.

You cannot wage war on those children, making it harder for them to eat, graduate from high school and enter the workforce, at the same time you’re trying to help them escape their reliance on state and federal welfare programs.

Lawmakers spent hours in closed-door sessions during the last few days discussing the sales tax increase. They even scheduled a joint House and Senate tax committee meeting tonight, Tuesday, March 7, to speed passage of the bill. The session ends at midnight Thursday.

But early Monday evening, a spokesman for House Speaker Greg Hughes texted that the bill was dead.

Good. Utah may or may not require additional revenue; we can’t say without study.

One thing we know, however — Utah’s poor should not be forced to bear the burden if lawmakers decide they need more money.

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