The 2023 General Utah Legislative Session ended around 10pm on Friday, March 4th after 45 days of bill filings, committee hearings, floor debates and votes. The Legislature tackled many major issues and topics and the 2023 session could go down as one of the most consequential in many years.
This year, your Utah Taxpayers Association took a position on and tracked 71 bills related to taxes and spending.
We supported 29 of those bills.
We opposed 26 of those bills.
We were neutral on 17 bills.
Some Utah Taxpayers Association high priority bills passed this year included:
1 Sub SJR 10 (McCay) Proposal to Amend Utah Constitution – Income Tax
Although this constitutional change will ultimately be decided by voters on the 2024 ballot, SJR 10 was just about the most important bill this session. It proposes to remove the constitutional earmark which currently restricts the spending of income tax revenues to only education, with some exceptions for children and disabled services. Provided taxpayers vote in favor of this amendment, SJR 10 will bring Utah in line with every other state in the nation which has freedom and flexibility in their budgeting process. It will allow Utah to compete with other states and will streamline funding by allowing appropriations to be determined by needs rather than constraints. Between now and the 2024 ballot, your Utah Taxpayers Association will work to ensure the passage of this amendment by voters.
4 Sub HB 54 (Eliason) Tax Revisions
This was the “big tax bill” promised by Utah legislators in response to the $4.65BN surplus. It is comprised of four main elements: reducing the individual and corporate income tax rates from 4.85% to 4.65%; providing an additional dependent exemption in the year of birth; expanding the Social Security tax credit; and removing the state sales tax on food contingent on the passage of the constitutional amendment outlined in SJR 10. This bill will offer significant tax relief to many Utahns and demonstrates a healthy perspective within the legislature: that surpluses ought to be returned to taxpayers rather than spent. Although this bill came with the concession of removing the sales tax on food and an income tax rate cut that was less than revenue estimates supported, it nonetheless represents a great win for Utah taxpayers.
3 Sub HB 215 (Pierucci) Funding For Teacher Salaries and Optional Education Opportunities
This bill established the Utah Fits All Scholarship Program and raised teacher salaries by $6,000. The passage of this bill represents a win for taxpayers by increasing funding per student in the classroom, allowing parents to spend education dollars as best suits their child and family circumstances, and giving teacher raises directly to teachers to avoid this appropriation being absorbed by the school system or administrators.
Some Utah Taxpayers Association high priority bills the association opposed this year included:
SB 255 (Winterton) Sales and Use Tax Amendments
This bill would have allowed a county legislative body to reauthorize a RAP/ZAP tax rather than voters as is currently required by statute. The addition or continuation of sales taxes without the explicit and ongoing consent of taxpayers is a method of hiding the cost of government, making this important legislation to oppose. Instead of hiding or creating revenue sources, the Utah Taxpayers Association would encourage counties and cities to find ways to reduce their budgets and work with current revenues.
SB 295 (McCay) Dedicated Infrastructure District Act
This bill would have created Dedicated Infrastructure Districts which would act similarly to PIDs with tax raising powers but without any elected oversight. This unprecedented act of giving developers the ability to set and raise taxes without any elected oversight would have left taxpayers with no recourse to oppose the taxes. Taxpayers should always have the opportunity to oppose taxes. Ultimately this bill was not heard in the Senate or the House.
We also opposed several tax credit bills which had a collective fiscal note of over $140MM. These would have carved out the tax base and undermined the case for a future general income tax rate cut.
Total spending this session totaled $29.4BN – a record for the Utah legislature. This includes $14.6BN from the General Fund, Income Tax Fund, and Uniform School Fund. Highlights of the 2023 General Session Budget have been published by the Office of the Legislative Fiscal Analyst; your Utah Taxpayers Association will review the budget in detail and publish the Pork Barrel Report with our findings at the end of the year.
As ever, work remains to be done. Although this was a successful session, we will continue to work during the interim to prepare legislation for the next session in 2024. These already include:
– Allowing local school districts’ proposed tax increases to be referred to voters for approval or rejection by referendum. (This was proposed in 2023 in HB 372 but was not heard in committee)
– Establishing a 60% threshold for the passage of statewide initiatives by voters that would increase taxes (This was proposed in 2023 in HJR 17 and passed the House, but was not heard in the Senate)
– Decoupling from the federal government and continuing to allow 100% expensing of business capital investments.
You can review our final 2023 Watchlist here.