Forecasts for FY2024 show a $3.3bn revenue surplus for Utah. While the Governor and both House and Senate leadership have all acknowledged that a portion of the surplus should be returned to taxpayers in the form of tax cuts, the Invest in Utah’s Future Coalition has instead suggested a $5.6bn wishlist of additional spending. Many of the ideas included are noble – including reducing class sizes from 29 to 15, additional funding for disability services, and extending health insurance access – but the $5.6bn price tag would not only eliminate all surplus funds, but also necessitate creating additional revenue through tax hikes.
This is both unnecessary and unfair. The Utah Foundation shows that Utah ranks better than the rest of the nation for quality of life, happiness, and family life. Utah has a robust middle class, the highest birth rate in the nation, and the highest level of social capital which includes metrics such as civic engagement, social trust, and social cohesion. In 2021, Forbes magazine ranked Utah as number one in the nation for GDP growth. It is possible that additional spending could strengthen Utah’s position as best in the nation for many of these measures and improve its position for many more; however, it is clear from both social and economic perspectives that Utah has been successful on current and historic budgets.
Although the current price tag for the suggested additional and extended services is $5.6bn, this figure would inevitably increase as public appetite for government intervention increased, and costs rose. This has been the case with virtually every government program in history – from Social Security, to Medicaid, to public education. The role of government must be clearly defined and limited to avoid the creation and funding of services that could be reasonably and efficiently provided by either private entities or charities, or a combination of both.
The argument that individuals should be taxed more to fund government spending on non-essential services assumes that money is better spent by the government than by individuals, and that those who benefit from these additional services deserve these services more than the taxpayers who fund them deserve lower taxes. Taxpayers are entitled to a fiscally responsible government, and to a return on their investment. The vast majority spending suggested by the Invest in Utah’s Future Coalition does not permanently solve problems but would be ongoing expenses. And even after addressing class sizes, mental health and substance abuse, housing for seniors, and air quality in schools, there would still be a plethora of problems unsolved – roads, law enforcement pay, higher education funding, etc. Additional spending will always demand additional taxes, therefore any spending should be carefully considered.
Invest in Utah’s Future Coalition makes the argument that tax cuts would be an economic stimulus and that, given inflationary pressures, this would be unwise. This is ideologically untrue – tax cuts allow taxpayers to keep more of their money; stimulus checks give everyone a portion of taxpayers’ money. It is also untrue in practice. Cutting the income tax to 4.5% would provide a tax cut of $354 for a family of four earning $75,000. While this is a meaningful tax cut to an individual family, it is not sufficient stimulus to alter the state, national, or international economy.
Utah’s budget surplus represents a thriving economy and a responsible legislature. How much the government should spend is really a question of how much the government should do. Where demands on government for services increase, spending is sure to increase, and when demands outstrip supply, tax increases follow. In order to keep both spending and taxation under control, there needs to be a limit on how much is expected of the government.