Food tax hike considered as Utah lawmakers face budget issues

SALT LAKE CITY -- Utah lawmakers are contemplating a hike on the food tax as they grapple with a decline in revenues for the state's multi-billion dollar budget.

Speaking to reporters on Tuesday, Senate President Wayne Niederhauser, R-Sandy, said it was "on the table." However, he cautioned that no decisions have been made.

"I say it’s still a possibility. How probable it is? That’s up for debate and we’re not closing the door on anything and saying we’re going to deal with it next year," he said.

The state budget funds everything from roads to education. Sen. Jerry Stevenson, R-Layton, who oversees the budget for the Senate, said this year was "not the best budget year." Sales tax revenues have declined -- in part because of online purchases.

"We’re looking at some real declines in the way people purchase," he said Tuesday.

The governor has claimed the state is losing as much as $200 million a year in lost sales tax to online purchases. Recently, Internet sales behemoth Amazon began collecting state and local taxes for purchases made on its site.

The food tax is one subject that isn't politically popular. In past years, lawmakers have lowered it to 3 percent (combined state and local) where it is now. Advocates for the poor argue that it hurts them especially, despite arguments that everyone pays for it because everyone eats.

"It’s tender because my Senate district is middle class America," said Senate Minority Whip Karen Mayne, D-West Valley City. "We love it that way, everybody works hard, I don’t think it would be my first choice."

Lawmakers are vowing over the next year to look at tax exemptions that are handed out.

"We are looking at restructuring. Creating more of a broad-based, lower rate type of infrastructure, tax structure that would actually generate more revenue," Sen. Niederhauser said.

The Senate president said if they go there with the food tax, other taxes would be lowered and spread out.

"If it’s combined with the lowering of the rate, maybe it’s palatable enough for some people and give us the political environment to act," he said.