In the upcoming 2015 legislative session, your Taxpayers Association will actively support legislation that will help improve the state’s economy and remove unnecessary government burdens on taxpayers. We will also stand against any discussion of raising taxes in the upcoming year. Lawmakers have announced they anticipate having more than $600 million in new revenue for the upcoming budget. With such a large amount of additional funds available this year, no plan to raise taxes should be considered. To do so would be irresponsible and punish the hard working individuals and families of Utah who have worked so hard to help the state climb out of the Great Recession and into economic success.
In addition to opposing any new taxes, your Taxpayers Association also will address a number of other important issues that will be considered in the upcoming session. Bills will be tracked and added to our “legislative watchlist,” updated and available on our website each Friday of the legislative session.
Transportation Funding
Paying for Utah’s roads will be a major topic during the upcoming session. The legislature’s Transportation Interim Committee has studied the issue over the past year and various proposals will be discussed during the session. While the state gas tax has not increased since 1997, demand for Utah’s transportation dollars has risen dramatically over the past 17 years. In the past your Taxpayers Association has supported a rise in the gas tax, as it is a user fee for those who use roads in the state, but it also has called for lawmakers to simultaneously lower the state’s income tax to make the gas tax increase revenue neutral in the state budget. The Association has also called for the elimination of all sales tax earmarks for transportation, as using a general sales tax for road funding fails to connect user cost with system use.
We anticipate to see various legislative proposals discussed this session, from indexing the gas tax to authorizing a local option sales tax increase to pay for transportation. We urge lawmakers to remember the sound tax principle of user fees as they craft this legislation.
Medicaid Expansion
While there is some momentum for the legislature to take on the issue of Medicaid expansion during the 2015 session, your Taxpayers Association believes it will be in the best interest of the state to hold off on a final decision until the Supreme Court rules on the King v. Burwell case that deals with subsidies used with the state and federal exchanges for enrollees.
If the court rules that only state based exchanges can take advantage of the federal subsidies provided to make the government insurance more affordable, then the structure that “Healthy Utah” is based on will need to be revamped. This uncertainty places taxpayer dollars at risk.
We call on the Legislature and Governor Gary Herbert to wait for the King v. Burwell case to be resolved and then work together to create a program that provides a safety net for those who find themselves in unfortunate circumstances but not a destination for those looking for cheaper health care on the back of taxpayers.
H.B. 54 – Public Education Increased Funding Program (Rep. Draxler)
Representative Jack Draxler (R-Logan) is sponsoring H.B. 54, which calls for a 1% increase in the state’s income tax to pay for performance based incentive pay for teachers and for digital learning technology. While your Utah Taxpayers Association welcomes such programs, increasing the income tax to fund these programs is the wrong approach.
Utah is looking to be a competitive state in attracting the top businesses and top employees from around the country. A raise in the income tax will deter those businesses and talented workers from coming to the state of Utah.
Your Utah Taxpayers Association would welcome lawmakers reforming education funding in the state and finding the inefficient programs that should be eliminated from the state budget. The money saved from those programs should then be used to pay for items such as incentive pay for teachers and technology in the classroom.
Assessment Area Act Modifications (Rep. Webb)
This legislation may sound familiar, as it is an issue that was addressed in the 2014 session, only to be later vetoed by the governor. The bill looked to rein in the use of assessment areas to avoid having to raise taxes in political subdivisions. In the heat of the session the bill also was amended to include a one-year moratorium on assessment areas. That moratorium was the reason the bill was vetoed, as it was explained it would have prevented crucial projects in rural Utah from moving forward.
Rep. Curt Webb (R-Logan) is looking to run this bill again in the 2015 session. Your Utah Taxpayers Association supports this legislation, as it will ensure political subdivisions are appropriately using assessment areas for their intended purpose, such as sidewalk improvements in a certain zone, and not for items or programs that do not directly benefit those paying for the service.
Centrally Assessed Property Valuation Appeals (Sen. Bramble)
Senator Bramble is running a bill that will limit the ability of counties to egregiously appeal centrally assessed property valuations. For years, your Utah Taxpayers Association has been concerned by the way counties appeal the assessed valuation of centrally assessed properties, incurring legal fees paid for with county tax dollars and rarely increasing property tax revenues through successful appeals. Sen. Bramble has been working with the Association of Counties, the Utah Taxpayers Association, and other stakeholders to develop legislation that will establish a threshold at which counties may intervene and appeal centrally assessed property valuations, removing nuisance appeals paid for with taxpayer dollars. In October’s Revenue and Taxation Interim Committee data prepared by the Office of Legislative Research and General Council showed that between 2005 and 2014 counties issued eighty appeals but only “won” eight, and the average amount of valuation adjustment in these “wins” was $3 million, only yielding about $30,000 for the counties.
Defining “Eligible New Growth” in Property Tax Rate Calculations (Rep. McCay)
Representative McCay is sponsoring a bill that will change the calculation of property tax rates by defining “eligible new growth” as new, locally assessed real property growth. This removes centrally assessed and personal property from new growth in calculating the certified tax rate. Rep. McCay’s change will make taxing entity revenues less volatile and will address problems revealed in the July 2014 State Auditor’s performance report on the calculation of the certified tax rate. While your Taxpayers Association applauds Rep. McCay’s plan to refine and improve the property tax calculation, we would like to see the legislation go one step further by including a component that would address the windfall in revenues that taxing entities enjoy when centrally assessed properties experience high levels of growth and the burden that an increased revenue level becomes on other local taxpayers when the value of centrally assessed properties fall.