On May 28th the Utah Taxpayers Association held its 37th annual Utah Taxes Now Conference at the Grand America Hotel. Over two hundred attendees participated in the annual tax summit.

   Twenty-five presenters covered over a dozen different topics throughout the day, including economic development policy, education funding, transportation changes, Medicaid expansion, water funding, and federal tax and regulatory reform. Distinguished speakers included Congressman Chris Stewart, House Speaker Greg Hughes, Utah State Representatives and Senators, GOED Executive Director Val Hale, and State Superintendent of Public Instruction Brad Smith. Below are some of the highlights from the conference.

The Hidden Costs of Tax Compliance

   This year’s keynote speaker was Dr. Jason Fichtner, Senior Research Fellow at the Mercatus Center at George Mason University. His lunch presentation, “The Hidden Costs of Tax Compliance” focused on the unseen burden of a complex tax code and some surprising facts about who pays taxes and how much.

   Dr. Fichtner showed how growth in government programs correlates almost exactly with growth in government debt and he pointed out that unfunded liabilities of the federal government (future payment obligations that exceed the funds available to pay) total $200 trillion. When it comes to government programs, taxpayers always pay – there is no such thing as a free lunch.

Reforming Taxes for Economic Development

   Senator Stuart Adams presented on SB 267, which removes the three-year economic life provision to extend the manufacturing sales tax exemption to all business inputs. During the 2015 legislative session SB 267 passed out of the Senate, and Senator Adams plans to push this legislation again next year. Good tax policy is one that only taxes final products, not inputs to production.

Senator Deidre Henderson addressed how changes to Utah’s corporate income tax structure can jump start economic growth in the state and reminded attendees that corporations don’t pay taxes – people do.

   Jonathan Ball, Director of the Office of the Legislative Fiscal Analyst presented on dynamic scoring and how fiscal notes that include both costs and benefits give a more accurate picture of impact to the state budget. For example, removing the three-year economic life provision of the sales tax exemption would “cost” the state in terms of lost revenue, but growth in wages and GDP would pay off in terms of economic benefit to Utah.

Changes to Utah’s Transportation Funding Structure

   Senator Curtis Bramble, Ken Bullock, the Executive Director of the League of Cities and Towns, and Linda Hull, UDOT’s Policy and Legislative Services Director all covered the recent changes to Utah’s transportation funding structure and described how new money in the transportation fund will be used. Utah is part of a 12 state coalition studying Vehicle Miles Traveled (VMT) as an improved method of funding highways and this is something that will be explored by UDOT and the State Legislature in coming years. Your Utah Taxpayers Association encourages further exploration of VMT as a transportation funding mechanism because it directly ties system use with system cost as a user fee.

Certified Property Tax Rates

   Representative Dan McCay reported on HB 328, a bill he sponsored during the 2015 legislative session that passed through the House. HB 328 removes centrally assessed properties from the calculation of new growth in the certified tax rate. This change will prevent the ratcheting upwards of tax revenues to taxing entities and protect homeowners from arbitrary tax hikes when the economy fluctuates.