Tax reform? Nothing to see here, folks; move along! - Deseret News

SALT LAKE CITY — In an absurdly funny scene from one of the “Naked Gun” movies, a car chase ends with the bad guy smashing his car into a gas truck, then colliding with a military vehicle carrying a missile, and finally, while somehow riding on the missile, crashing into a fireworks factory.

While massive explosions from the rubble send projectiles in all directions, Sgt. Frank Drebin (played by Leslie Nielsen) looks ridiculous as he stands in front of it all and tells a gathering crowd, “Nothing to see here! Please disperse!”

Utah lawmakers aren’t exactly pretending there is nothing to see in the rubble of tax reform, which took a year of legislative wrangling to become law but will likely be ignominiously repealed entirely this week.

House Speaker Brad Wilson called it “the elephant, or, to be bipartisan, the donkey in the room” as he welcomed representatives to the first day of the annual session.

But they’re hoping you don’t look at it too long.

Such is the power of the people. Get enough voters to sign a petition and a centerpiece of legislative achievement quickly becomes something no one wants to invite to the party. The swiftness and fervor with which people signed petitions to put a repeal vote on November ballots caught the attention of many politicians, especially in an election year.

It also highlighted an irony.

Lawmakers had made a point of holding several months’ worth of public hearings around the state last year. The idea was to explain the need for tax reform and to both educate and gauge public sentiment.

But it turns out they didn’t really gauge true public opinion until the petitions started flying.

The dirty little secret about public hearings is that they tend to be dominated by special interests, not average people.

And now, assuming the law is repealed this week as planned, the elephant/donkey is likely to remain in the corner of the room while everyone pretends not to see it.

Don’t look for anyone else to take a stab at reform this year. It’s an election year. A new governor will assume office in 2021. Let him, or her, decide what to do.

But you can’t kick the elephant/donkey out of the room. The problem isn’t going anywhere.

In short, income tax receipts are growing faster than sales tax receipts. This isn’t unique to Utah, but the Beehive State is unique in that it earmarks all income tax money for education.

Last year, Gov. Gary Herbert was fond of noting that transactions subject to sales taxes had shrunk from 70% to only 40% over the last four decades. Something had to be done.

Well … lawmakers aren’t exactly retreating from that position. They’re just saying something doesn’t have to be done right now.

Speaking to reporters Monday, Senate President Stuart Adams said the good news is the Legislature started working on tax reform long before it was truly necessary, “and we still have time.”

“I wondered if we were too early,” he said. “Sometimes you need the sky to fall before people know there is a problem.”

When I asked how many years the state had left before that crisis, he said the answer depended on the economy. If a recession comes, income tax receipts would drop and the state wouldn’t be able to shore up schools with sales taxes.

Until then, as executive appropriations co-chairman Sen. Jerry Stevenson assured reporters, the state will be fine. Once 2021 rolls around, lawmakers can start worrying about tax reform again, only this time without trying to raise sales taxes on groceries.

The intersection of politics and practicality can be a messy one. Business owners can pivot quickly when problems come. Politicians can’t pivot faster than public opinion will allow.

The budget imbalance is real. Finding a solution won’t be easy.

In the meantime, however, don’t look for any public hearings on the bill to repeal the tax reform law. There won’t be any. A year’s worth of work will quietly disappear.

Nothing to see here, folks. Move along.

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Tax reform? Nothing to see here, folks; move along! - Deseret News
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