Utah taxpayers took one hit after another during the 2015 legislative session. From increases in property and fuel taxes to the legislature giving the green light to two local option sales taxes, taxpayers will remember this session as a painful one.
Utahns will see the statewide property tax levy raised by $75 million to help narrow the funding gap among Utah’s school districts. This tax increase will result in a $48 rise in property taxes for a home worth $250,000. Business owners of a property valued at $1 million will see an increase of $348.
Your Taxpayers Association met several times with the bill’s sponsor, Sen. Aaron Osmond (R-South Jordan), to discuss alternative methods of closing the gap among Utah’s more affluent school districts and the districts that aren’t as fortunate. Osmond declined to include any of the Association’s suggestions and chose to keep the large tax increase as part of the bill.
As for Utah’s fuel tax, taxpayers will now pay five cents more at the pump starting in January 2016. But that’s not all; once the wholesale price of gas rises above $2.45 per gallon, taxpayers will see additional rate increases when they fill up their vehicles. The state will be allowed to collect higher fuel taxes until the rate reaches 40 cents per gallon. Essentially, lawmakers put in place a 15.5 cent gas tax increase.
The fuel tax legislation, H.B. 362, sponsored by Rep. Johnny Anderson (R-Taylorsville), also includes a quarter cent local option sales tax. Utah’s counties are now authorized to impose the tax if voter approval is received. Money raised from this sales tax will be split between counties, cities, and UTA to go towards local transportation needs and other projects such as trails and sidewalks.
Estimates from the Legislative Fiscal Analyst find that an individual who drives a car 12,000 milers per year and gets 25 miles-per-gallon will see a $24 increase in the amount they pay at the pump due to the fuel tax increase. Utahns may also pay an additional $145.7 million in sales taxes if every county approves the local option tax increase.
In addition to the local option sales tax for transportation, another local option sales tax increase was also approved by the legislature in the final hours of the session. With less than four hours to go, lawmakers substituted HB 454, Prison Development Amendments, to second substitute HB 454, which includes a .5% local option sales tax increase for whichever city is awarded the prison.
During the Senate floor debate on HB 454, it was noted that this increase could push the sales tax rate above 7% in Salt Lake City, if that is Adding this .5% to the .25% local option sales tax that counties may soon impose, Utahns sales tax rates are certainly set to climb.
If tax increases weren’t enough, the drubbing on Utah’s taxpayers continued as lawmakers also threw “pet projects” into the final budget, instead of using that money to keep taxes lower.
Included in the final $14.2 billion state budget is a number of line items that should raise every taxpayer’s eyebrows. Under the Business, Economic Development and Labor section of the budget, $1.5 million is appropriated to fund recruiting activities for Utah State University’s athletic program. A taxpayer would not be able to know that though, as the line item is listed as the “Utah Wellness Program.” Another item includes $150,000 for an outdoors sporting expo held in Utah County. Another $250,000 is allocated for the Utah Symphony to make a documentary.
Digging further into the budget, the legislature also approved putting $5 million into a newly created account for water infrastructure projects. The account, created by SB 281 sponsored by Sen. Stuart Adams (R-Layton), calls for money within the account be used to fund water projects such as the Lake Powell Pipeline. No justification for the pipeline has yet been made, and to use taxpayers as the “bank” to start putting money aside for this water project is premature and inappropriate.
Your Taxpayers Association holds the state’s elected officials accountable for these tax increases and poor use of taxpayer funds. Utah has thrived because of its low tax environment. Any tax increase threatens Utah’s status as the best state for business.