New fees to compensate deficit?

A chorus of political voices is beginning to sing out suggestions for filling an estimated $650 million to $850 million deficit in the Utah state budget.

Among the ideas floated in the last week for lawmakers to look at in the 2010 session are: increasing the tax on unprepared food, more tobacco taxes and higher gasoline taxes.

One concert master for finding harmony among the suggestions is the newest state senator from Davis County, Stuart Adams.

The Kaysville businessman and former Utah House member was given the chairmanship of the Senate Revenue and Taxation Interim Committee, where the proposals may be explored.

“It is really hard to know whether or not the only option is to raise taxes,” said Adams, who was appointed to the Senate and seated in September.
“There is only so much you can cut,” he said.

On Thursday, the Utah Tax Review Commission prepared a letter aimed at Adams’ committee, suggesting the state sales tax on unprepared food be considered for reinstatement to a previous level. The TRC voted to support exploring the reinstatement idea on a 7-5 vote.

In 2006 and 2007, with ardent support from former Gov. Jon Huntsman, lawmakers passed reductions in the tax, reducing the rate from 4.75 percent to 1.75 percent. Bringing back the tax recently received support from the Utah Taxpayers Association.

On Wednesday, the Salt Lake Chamber of Commerce offered its budget plan, outlining what it called “targeted” fees.

“We support increasing targeted user fees,” said Lane Beattie, the chamber president.

“We recommend that the gas tax be increased by 10 cents a gallon and that we raise the cigarette tax to at least the national average,” she added.

To help close the structural budget deficit, the chamber also proposed using approximately half of the state savings, called the Rainy Day Fund, plus use all of the $100 million set aside for education in earlier years.

But a counter melody to the revival of the “t” word is a general opposition to new taxes by Gov. Gary Herbert, who early on said he was against increases on such items as tobacco, an option suggested in late summer.

“With the down economy right now, raising taxes would have a dampening effect on economic growth,” Herbert said.

Social service advocates and other lawmakers also voiced their concern about increasing the money people pay for daily expenses, such as unprepared food and travel money used at the pumps.

“At this time, when people are struggling … to feed their families,” said Linda Hilton of the Coalition of Religious Communities at the TRC meeting.
“It is unconscionable … that we raise the sales tax on food.”

Adams, as a member of the TRC, had voted Thursday against the option of potentially increasing the food tax and suspects the idea will have tough sledding at the statehouse.

But as the amount of the projected deficit more and more comes into focus, Adams and other legislators will begin weighing their options.

“You’ll never know, until you get into the session,” he said.

Utah lawmakers convene for that session Jan. 25.