The case for tax reform presented to Cache Valley residents

State and local representatives outlined their cases for sales tax reform to Cache Valley residents during a two hour town hall meeting Wednesday night at the Historic Cache County Courthouse.

“I’ve painted a pretty bleak picture,” said Sen. Lyle Hillyard, R-Logan. “It’s going to be tough and we’re going to have to make some decisions on how we do it.”

What they need to do, according to Hillyard, is look for ways to meet the demands of a growing population and a shrinking sales tax base.

Hillyard stressed that income tax revenues, which are set aside specifically for public and higher education, are outpacing growth in sales tax collections that fund areas like public safety, social services and Medicaid.

“Sales tax is a slouch, that’s the problem,” according to Utah fiscal analyst Jonathan Ball, who presented a number of slides and graphs in an effort to define the issues facing taxpayers.

“Sales tax doesn’t keep up with the economy. It’s doesn’t keep up with income. It doesn’t even keep up with total consumption,” said Ball. “Because of that, the sales tax base in Utah, the growth rate, has been declining over time,” he said.

The decline is occurring, stressed Ball, because “our consumption patterns have changed.” Consumers are spending less on taxable goods and more on services that are not taxed.

With just a week left before the 2019 legislative session ended, Gov. Gary Herbert and Republican legislative leaders rejected a tax reform plan extending sales taxes to services.

House Bill 441 would have imposed taxes on services including haircuts, lawn care and legal assistance in an effort to ultimately lower sales and income tax rates.

Gov. Herbert said he’d liked to see a new plan dealt with in a special session.

Before that happens, Hillyard and members of a newly-formed tax reform task force will spend the next few months holding similar town hall meetings across the state in an effort to educate Utah residents on tax reform and find solutions.

“If you have specific concerns or ideas to help make it better, send those to us,” said Rep. Casey Snider, R-District 5, during Wednesday night’s town hall. “We’ll try to work something through this summer with the intention of solving this sometime in the next year.”

Recommendations and ideas can be emailed to lhillyard@le.utah.gov.

A replay of the town hall meeting can be seen here on Facebook.

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