The main feature of his budget proposal? Surprise, surprise: another tax cut.

Since 2021, Cox and the GOP-controlled Utah Legislature have approved about $1.2 billion in tax cuts, most of which lowered the state’s income tax rate to 4.55%. But Cox doesn’t want to stop there, and now he’s recommending lawmakers go after another source of income tax revenue — the state’s tax on Social Security benefits.

The governor’s proposed budget characterizes the move as a “major tax overhaul,” and one that the Utah State Tax Commissions estimates will cost the state about $143.8 million a year but save the average Utah tax filer with Social Security benefits about $950 a year. State officials estimate the tax cut would benefit some 150,000 Utahns.

“By implementing this tax cut, Utah will demonstrate its dedication to the well-being of older adults and foster a more supportive environment for those who have contributed to the state’s growth and prosperity,” Cox’s proposed budget says.

Utah is currently one of nine remaining states that still tax Social Security benefits, including Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Vermont and West Virginia. However, West Virginia has started to phase out its tax, expecting to completely eliminate it when 2026 taxes are filed in 2027.

Why Cox wants to nix Social Security tax rather than remove sales tax on food

In order to fund that tax cut, Cox is proposing lawmakers use revenue that lawmakers previously set aside in anticipation of eliminating the state’s portion of sales tax on food — something the Legislature made contingent on voters approving a constitutional amendment that would have removed the state’s earmark on income tax dollars for education.

However, in October a judge voided that ballot question, Amendment A, after Utah’s largest teacher union and other plaintiffs sued, and a judge ruled the Legislature failed to properly notice and publish the proposed constitutional amendment under the Utah Constitution. It’s possible lawmakers could try again, but their next opportunity to place a proposed constitutional amendment on the ballot wouldn’t be until the next even-yeared general election, in 2026.

“Since that’s now tabled and we know the Legislature won’t be able to entertain that for another couple of years, we’re preserving that commitment for tax relief in the form of eliminating” the state’s tax on Social Security benefits, Sophia DiCaro, executive director of the Governor’s Office of Planning and Budget, told reporters during a briefing Wednesday ahead of the budget unveiling.

Rather than eliminate the state’s sales tax on food (something low-income advocates have long sought) regardless of the contingent constitutional amendment, DiCaro said Cox is recommending the Legislature “rededicate” that revenue as a different type of tax cut because removing the food tax without also lifting the earmark on income tax dollars would make it challenging to balance the budget.

State officials have long said the state’s budget has faced a “structural imbalance” because income tax revenue growth (which funds education) has been outpacing other types of revenue growth, which fund other needs from the general fund. “If that sales tax on food passed without removing the (income tax) earmark, it would hit entirely on the general fund side, which would make it really difficult to balance the budget in that circumstance,” DiCaro said.

Cox’s budget proposal is just that — a proposal. The Utah Legislature will decide what Utah’s budget for the coming fiscal year, which begins in July, will actually entail. Lawmakers are scheduled to convene for the 2025 general session on Jan. 21, and they typically don’t finalize the budget until the final days of the session, which will end on March 7.

Cox told reporters after he unveiled his budget proposal Thursday morning that even though he’s been supportive of removing the food tax, doing so would be problematic without changing the Utah Constitution.

“Because that amendment did not move forward … our hands are kind of tied,” he said. “We can’t do that until we get a constitutional change.”

Additionally, Cox said he favors another income tax cut — but one “targeted to our seniors” — because he sees it as more impactful than removing the state’s grocery tax.

According to the fiscal note of the 2023 bill that lawmakers passed to remove the food tax only if voters approved the constitutional amendment, a household that spends $6,000 a year on food would save about $105 a year under that tax cut, though that number could vary depending on how much Utahns spend on groceries. Though eliminating the Social Security tax would benefit fewer people, Cox said its benefits will be more noticeable, especially for seniors on fixed incomes.

“Giving everybody a tiny cut versus giving our seniors a very big cut, I think it’s a no brainer,” Cox said. “I can defend that. I certainly know our seniors can defend that. I just don’t know how many people get excited about an additional $15 or $20. But I know a lot of people living on fixed incomes who could use $1,000.”

Cox’s budget proposal is just that — a proposal. The Utah Legislature will decide what Utah’s budget for the coming fiscal year, which begins in July, will actually entail. Lawmakers are scheduled to convene for the 2025 general session on Jan. 21, and they typically don’t finalize the budget until the final days of the session, which will end on March 7.

“They have the constitutional duty of the purse strings,” Cox said of the Utah Legislature, adding that the budget will ultimately be up to them. “We look forward to engaging with them over the course of the (2025) session.”

Cox said he hasn’t yet had an “in depth discussion” with legislative leaders about eliminating the Social Security tax, “but I do know they have had discussions about it.” He added lawmakers are expected to consider several bills that would cut taxes in various forms, including at least one that would partially roll back the Social Security tax rather than totally eliminate it.

“So that’s where the negotiations will take place, and we’re very hopeful that they’ll take it seriously,” Cox said. Asked whether he’d be supportive of an incremental phasing out of the tax rather than doing away with it all at once, Cox told reporters, “That’s better than nothing, but my proposal is better than that.”

Senate President Stuart Adams, R-Layton, and House Speaker Mike Schultz, R-Hooper, issued a joint statement Thursday saying they “appreciate” the governor’s budget proposal while pledging to “remain committed to fiscal responsibility and strategic planning for the future.”

“During the 2025 session, we will continue prioritizing tax relief to foster economic growth and keep Utah competitive, strengthen education, expand energy and other critical infrastructure and address water needs while maintaining fiscal stability, ensuring that all Utahns have the opportunity to thrive,” Adams and Schultz said. They did not respond to a question asking specifically whether they’d support the governor’s proposal to entirely eliminate the Social Security tax.

The Social Security tax elimination is only one feature of Cox’s proposed budget, which he presented at the William E. Christoffersen Salt Lake Veterans Home in Salt Lake City — meant to highlight a major theme in the governor’s proposed budget, with initiatives to bolster resources for Utah’s aging population, including veterans.

Here are other proposals to increase resources for seniors, according to Cox’s proposed budget:

• $20.5 million to support “aging in place,” or increasing home-based care. This would include $7.3 million in state funds along with $13.2 million in federal funds meant to “promote independence and reduce reliance on costly institutional care.”
• $1.4 million for Adult Protective Services, the Office of the Public Guardian, and a Southern Utah Medicaid Fraud and Patient Abuse Office, meant to “strengthen protection for vulnerable seniors.” Cox’s budget document says the funding will “improve response times to abuse and neglect cases and safeguard older adults from fraud and exploitation.”
• $4.5 million for Meals on Wheels, a program that delivers healthy food to home-bound seniors.

A 92-year-old army veteran named Gordon Steck, who currently lives at the veterans home where Cox unveiled his budget, attended the governor’s announcement while wearing his purple heart hat. In an interview with Utah News Dispatch, Steck applauded Cox’s proposal to eliminate the Social Security tax. Though he said he feels fairly secure in his own budget, he said there are other seniors who probably “need it more than I.”

“It’s being done in other places,” Steck said. “So why can’t we do it?”

Aside from the proposal to eliminate the state’s tax on Social Security benefits, Cox’s budget proposal includes investments focused on doubling the state’s energy production — including nuclear — plus hundreds of millions of dollars to fund school safety.

His proposal also includes nearly $19 million more for homelessness as state officials look to increase Utah’s emergency shelter capacity. He also wants to add another family shelter somewhere in Salt Lake County (currently the only family shelter is located in Midvale).

Here are some other highlights of Cox’s budget proposal:

Families and children

• $130 million to help school districts implement recommended school safety measures
• Use $1.9 million in state funds to leverage $95.5 million in federal funds for the SNAP summer program, which would allow about 260,000 low-income students to access a $120 food waiver during summer break through the 2028 fiscal year.
• $5.2 million to further expand access to free meals to all students who otherwise qualify only for reduced-price meals.
• $3.7 million to help school districts manage cellphone use in classrooms.
• $2.1 million to expand the state’s child tax credit for families of up to four children.
• $3 million to increase child care facilities across the state.

Vulnerable populations

• To total $33.1 million, Cox wants to use $11.5 million in state funds to leverage $21.6 million in federal funds to help children in state custody receive quality outpatient behavioral health care services, legal representation, and care for disabled youth.
• To total $11 million for people with disabilities, Cox wants to use $5.5 million in state funds to leverage $5.5 million in federal funds to help people with disabilities find employment.
• Totaling $11.5 million for opioid response, Cox wants to use $6.5 million for opioid treatment and recovery in Utah’s correctional facilities. He also wants to use $5 million of the state’s opioid settlement funds to offer grants to rural areas for prevention, treatment and recovery in rural counties.
• Totaling $18.8 million for homelessness efforts, Cox wants to use $3.8 million in ongoing money and $2 million in federal funds to open a second family shelter somewhere in Salt Lake County. He also wants to use $11 million in one-time money and $2 million in ongoing money from the state’s new round-up donation program at liquor stores to fund “statewide emergency shelter” to bolster overflow space in both the summer and winter.

Energy production

As part of his previously announced Operation Gigawatt, Cox wants the state to double its energy production over the next 10 years. To do so, he’s recommending a total of $24.7 million for the initiative to “attract private sector investments.” His budget proposal includes:

• $20.4 million (including $400,000 in ongoing funding and $20 million in one-time money), to “lay the groundwork for deploying nuclear power generation in Utah. Developing nuclear assets will require a consortium of stakeholders to identify potential sites, bolster the regulatory framework, prepare for site permitting, and develop the infrastructure and economic ecosystem needed for nuclear deployment.”
• $4.3 million for geothermal, meant to support research and facilitate private sector investment in geothermal energy production.

In a scrum with reporters, Cox vehemently called for action to address what he called an “energy crisis” both in Utah and across the country. Utah, he said, can “lead the nation in energy production. We should not only have plenty of low-cost energy for people who live here, but we should be able to export that low-cost energy to other states and other nations as well.”

Along with the funding for nuclear site development and geothermal research, Cox said the federal government needs to drastically reform nuclear permitting regulations and the National Environmental Policy Act, which he blasted as “stupid” and unnecessarily unwieldy.

“Here’s the problem, folks. We can’t build stuff in this country anymore,” Cox said. “We’ve gotten so stupid as a country. The regulatory overload that’s happened in our nation is embarrassing. It’s an embarrassment to us as the greatest nation in the history of the world. It’s an embarrassment to the rest of the world, where they still can build stuff and we cannot.”

Cox, however, added that he understood why NEPA’s regulations were put in place, saying, “We were also making a lot of really dumb decisions in the ’60s and ’70s when it comes to protecting the environment,” he said. “We understand that now.”

His voice rising. Cox said even the “cleanest energy projects, the most important energy projects that are being demanded by environmentalists across this country, cannot be built because we have these stupid, stupid NEPA policies that don’t allow us to build the stuff we need to build.”

“It’s time to stop the madness,” he said. “It’s time to start building nuclear again. It should not take us 15 years to build a nuclear facility that costs three times what it’s supposed to cost.”

With President-elect Donald Trump returning to the White House, Cox said he’s “excited to have an administration that finally gets that,” adding that he’s already been in talks with North Dakota Gov. Doug Burgum, whom Trump has nominated to serve as U.S. Secretary of the Interior and chairman of the newly formed National Energy Council.

“He understands these issues,” Cox said. “We’re going to solve nuclear and all the other issues.”

Regulation issues aside, Cox said that Utah can start investing in nuclear site selection and preparation, which he said is “very expensive.” Initial investment, he said, will help attract companies that are interested in building nuclear power plants.

“If we can invest this, if the Legislature is willing to invest this, we feel confident that the private capital will come in huge numbers and allow us to lead on this,” Cox said. “I will also state I’ve reached out to my fellow governors in Idaho and Wyoming. We think this should be a regional project, and we can work together on this, and they’re very excited about that.”

Cox acknowledged there have been “disasters” that have caused U.S. nuclear development to slow, including the partial meltdown of a reactor at the Three Mile Island plant near Middletown, Pennsylvania in 1979. But he also noted that Japan, despite the Fukushima disaster in 2011, has been advancing in nuclear development.

To anyone concerned about nuclear development in Utah, Cox said, “please don’t freak out.”

“Please follow the science,” he added, noting that states like California or Mississippi have nuclear power plants that are more than 50 years old, “and they’re doing great.” He added technological advancements are helping nuclear power plants become cleaner and safer.

Cox added that nuclear energy development is key for carbon emissions reduction.

“Look, if you’re an environmentalist and you’re not pro-nuclear, I cannot take you seriously. I just can’t,” he said. “If you really believe in global warming, if you really believe that we need to eliminate carbon from the air, you have to be pro-nuclear. You just do. There is no other way possible to do this. We will never, ever build enough solar and wind to solve what we’re being told are the problems.”

Water development, Great Salt Lake and air quality

Cox wants to use $34.3 million to invest in the state’s watershed needs as the West continues to confront effects of drought, all while its population continues to grow and its infrastructure ages. He also wants to fund efforts to improve the state’s air quality.

His proposal includes:

• $16 million to match federal and private fundings to acquire water leases for the Great Salt Lake.
• $10 million for dam safety repairs and upgrades
• $651,100 to “better understand and mitigate” concerns around how wind-blown dust “poses an emerging risk to Utah’s health and air quality.”

Education

In total, Cox is recommending $759.8 million for public education, including $133.3 million for school safety, $101 million for teachers and $178.6 million for a 4% increase to the weighted pupil unit, or the per-pupil rate used to calculate how much money each school should receive.

While lawmakers eye whether to cut low-performing college programs and better align courses with workforce needs, Cox is recommending several programs related to higher education. They include:

• $22.2 million in “performance-based funding” to “promote student success and align higher education with today’s workforce needs”
• $2.5 million to increase technical colleges’ program capacity
• $2 million for a pilot program to “redesign general education curriculum for colleges and universities that will develop skills in critical thinking, civic leadership, and reasonable discourse”

As part of his budget recommendation, Cox also explicitly included a call on “college and university presidents to work with the Office of the Commissioner of Higher Education to better align curricula with workforce needs.”

State employees and state buildings

As part of a bid to continue the state’s “responsible fiscal management,” Cox’s budget also includes additional funding to keep and retain the state’s workforce, as well as fund infrastructure improvements to state buildings. That includes:

• $173 million for state compensation, including a 2.5% cost-of-living adjustment and increases in insurance premiums for state and higher education employees. It would also continue the state’s employee pay-for-performance program that was implemented in 2023.
• $230.9 million for investing in capital infrastructure and improvements to state buildings, including $84.5 million for “critical building needs,” $89.5 million for “key higher education capital needs,” and $15.5 million for “statewide space master planning efforts.”

Utah News Dispatch is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.