Gov. Spencer Cox is again advocating for tax cuts in his latest budget proposal.
In his plan, released in December, the governor called for eliminating the tax Utah charges on social security. The tax cut would complete a multi-year effort by the state to give relief to Utah’s senior community as the legislature and the governor have made incremental cuts in the past to the state’s tax on social security. Utah is one of only eight states that still taxes social security income.
The total tax cut would be $143.8 million and would result in $950 per year savings for an average filer. It is estimated the change would benefit around 150,000 Utahns.
The cut could come from new revenue the state collects in income taxes as Utah continues to have a strong economy. Money for the cut could also be found in the state budget which is expected to surpass $30 billion in the next fiscal year.
The Governor’s budget is a recommendation to the legislature and serves as a starting point for creating the state budget during the legislative session.
During the session, all 104 state legislators sit on budget subcommittees that review the various state departments and agencies and then make recommendations to the Executive Appropriations Committee (EAC) on how the state budget should be crafted. The EAC, which is made up of legislative leadership from both parties, then takes those recommendations from the subcommittees and drafts a final budget with tweaks that reflect the majority party’s budget priorities. The full budget is then voted on in a series of bills by the legislature and signed or vetoed by the governor. This governor does have line item veto authority on the state budget.
Cox, who will be starting his second term as governor in January, is no stranger to tax cuts. During his first term as governor he oversaw more than $1 billion in tax cuts and through this latest recommendation shows he is continuing his efforts to be taxpayer friendly as he heads into his second term.
According to the governor’s budget proposal, Utah is expected to have modest revenue gains for the upcoming fiscal year. The revenue forecasts, which are set by the Governor’s Office of Planning and Budget, the Office of the Legislative Fiscal Analyst, and the Utah State Tax Commission, show that the state should expect about $89 million in one-time dollars and $324 million in on-going money. Those figures already have $165 million set aside for a tax cut included so lawmakers and the governor won’t have to look for additional funds to make a tax cut in the 2025 session.
The governor’s budget also calls for expanding the state’s child tax credit to include children younger than one year of age. The cost for this expansion would cost $2.1 million. You can read the governor’s full budget proposal here: https://gopb.utah.gov/wp-content/uploads/2024/12/FY26-Budget-Book-1.pdf