The following are remarks as prepared for delivery by Rick B. Larsen, Sutherland president & CEO, to Utah’s Tax Restructuring and Equalization Task Force. This meeting was held Monday, Dec. 9, 2019, at the Utah Capitol to discuss the latest tax reform policy proposal. 

Sutherland Institute is pleased to comment on the debate surrounding current tax reform. Sutherland is aware of the issues – including the public perception that asks, “Why now? Why the rush?” With record-low unemployment and apparent growth all around, it seems counterintuitive that we should have a tax structure problem.

In our view, the facts of Utah’s economic consumption trends and actual revenue growth suggest that indeed we do. Our current tax structure is outdated and requires updating to meet a changing and growing economy. And the process – as illustrated by today’s version of the legislation – has been thorough and responsive.

For this reason, Sutherland supports the proposed tax reform legislation as an important and necessary step toward adjusting state public policy to meet the evolving economic and social circumstances – including but not limited to changing patterns in commerce, technology and significant population growth. The bill contains a policy approach that will reduce taxes for families, which are the driver of Utah’s economy. Further, the legislation lowers taxes in a manner that should improve families’ day-to-day finances through significant income tax rate cuts, with additional tax relief to low- and middle-income families through exemptions and tax credits.

We further support a special session this month which will sustain the momentum of current efforts and ensure that the 2020 general legislative session will not be a single-issue session.

With respect to the legitimate questions and concerns that have been raised and in order to ensure that passage of this tax reform legislation becomes more meaningful over time, rather than more controversial, it will be essential for policymakers to take ongoing steps beyond this bill. These steps must be grounded in sound principles and with an eye toward maintaining, and in some cases restoring, public communication and trust. This should include: (1) following through on this legislation with sustained and exacting scrutiny of spending of taxpayer dollars, including reallocation or repeal of spending that is deemed ineffective; (2) thoughtful reform of transportation funding with families and businesses first and foremost in mind, followed by the need for reliable revenue streams; (3) studying and crafting principled recommendations to address a sales tax system that threatens to pick winners and losers based on whether a business sells goods or services; and (4) careful consideration of education funding reform with a priority toward ensuring that each child is empowered to pursue the educational path that is best suited to their unique needs, as well as ensuring sustainable funding for public schools.

We support the intent and content of the current proposal. We view it as a critical step in creating sound emerging tax policy. Thank you.