Don’t overthink it, just cut taxes
This year has brought a flurry of ideas from state legislators on how to change Utah’s tax system.
Lawmakers are responding to constituents who have contacted them about increases in their property taxes, the rising fees imposed by local governments and school districts, or the burden they feel in their paychecks from the state income tax.
My concern with many of the legislative responses is that they focus on changing Utah’s tax system instead of addressing the root issue. Proposals have included caps on how much a local government or school district can raise revenue each year, or requiring a public vote if a government wants to increase taxes. These ideas have merit and should be considered, but they still miss the mark on what is being done, or not being done, to keep spending in check and reduce taxes and fees.
Governments in Utah are not hurting for cash. In our latest report on the highest-paid local government employees, we found that in Utah’s 50 largest cities, top employees in nearly every city earn well over $100,000 per year in salary. In school districts, many superintendents make well over $200,000 or close to it annually, with numerous staff members also exceeding the $100,000 threshold. And that doesn’t include benefits.
According to the Kem C. Gardner Policy Institute at the University of Utah, Utah’s median household income is $98,336. That suggests we may be reaching a point where government salaries are out of sync with what the private sector pays its employees or what small businesses generate for Utah families. It’s a data point worth considering when governments ask taxpayers for additional money.
So where do we go from here? Some argue that Utah’s tax system isn’t working or is broken. I’m not ready to say that.
Ultimately, if taxpayers don’t like how their elected officials vote on a tax increase, it is up to the taxpayers to elect new officials—ones committed to cutting spending and reducing taxes. Running to the state for a quick fix or a major overhaul of a system that has kept taxes low for four decades (specifically, Utah’s Truth-in-Taxation law) may feel like a solution. But will it actually curb spending or reduce taxes?
I’m not so sure.
Next year is an election year, meaning all members of the Utah House of Representatives and half of the state Senate are up for reelection. Legislators are motivated in election years to show their constituents they’ve accomplished big things. That’s normal and often positive, as it can create momentum behind good ideas.
With that in mind, my encouragement to lawmakers is to focus on what has worked in the past: cutting spending and reducing taxes. Utah has made meaningful progress in lowering the income tax over the last few years. Let’s continue that effort! Another recommendation is to conduct an audit of government employee salaries at every level. Let’s determine whether they align with private-sector pay and whether some positions may need downward adjustments.
Again, I believe our legislators are trying their best and have good intentions to bring relief to Utahns. But the clearest and most productive path forward is to focus on cutting taxes and reducing government spending. Let’s keep our attention there.