SALT LAKE CITY — After weeks of negotiation, legislative leaders announced a series of tax cuts.
House Bill 54 enacts more than $400 million in tax cuts and will do the following:
- Reduce the state income tax rate from 4.85% to 4.65%
- Expand a Social Security tax credit to seniors up to $75,000
- Enact a double-dependent exemption for pregnant women
- The Earned Income Tax Credit for Utahns on the lower-income scale increases from 15% to 20%
"For the average Utah family of four people? The median income, it’s just over $200 a year. Could it be more? Yes. But year after a year we have been cutting taxes and we believe $200 is better than no dollars," Rep. Steve Eliason, R-Sandy, told FOX 13 News on Thursday.
In the face of Utah's robust economy, legislative leaders have pushed for tax cuts. But the exact amount has been tricky. Some wanted a deep tax cut, while others wanted something more modest in case of a recession. On the flip side, advocates for Utah's poor wanted no tax cut and the money invested in social services.
"We think it’s a good start, if they indeed are going to 4.65%," said Rusty Cannon, the president of the Utah Taxpayers Association. "We think you could easily get to 4.50%. The best thing you can do for Utahns is a broad reduction in the rate that benefits taxpayers."
At his monthly news conference on PBS, Governor Spencer Cox said he would look at the tax proposals over the weekend and see how it compares to his budget priorities.
"I don’t feel like we’re going to get 100% of what we asked for but we’ll be close," he said.
Asked about a pending constitutional amendment that would remove the sales tax on food if the earmark on the income tax for education and social services was removed, Gov. Cox said he would be supportive "if done correctly."
"There’s an opportunity to have those discussions. They’re ongoing. My team has been involved in those with the education community, with education stakeholders," he said.
FOX 13 News first reported last week that discussions on that were under way. Senate leaders were also involved in those talks. The Utah Education Association, the state's largest teachers union, would only say those discussions are ongoing.
Senate Majority Whip Ann Millner, R-Ogden, said it was possible to see a proposed constitutional amendment before voters in 2024. Utah is the only state in the nation with the earmark, she said.
"We have to be able to fund lots of other essential services in government and we can’t right now," Sen. Millner said. "And that means you can’t take a tax cut there unless you have more flexibility."
Senate Minority Leader Luz Escamilla, D-Salt Lake City, said she understood the volatility issue of the sales tax and why the income tax earmark might need to be addressed.
"For us, it’s what can we protect with regards to education but at the same time find the balance," she said. "The sales tax on food has been a priority for us for many years."
