Surplus budget offers flexibility
If these trends continue over the next nine months, by the end of the fiscal year the state will have about $275 million extra.
A cash flow like that presents the Utah Legislature with a remarkable opportunity to take the sales tax off food. Not only is there the means to do it, legislative leaders and Utah's governor have expressed a will to do it.
At least two plans are on the table. Senate President John Valentine envisions removing the food tax completely and cutting state programs by $166 million, which is roughly the state's portion of the tax. Meanwhile, House Speaker Greg Curtis wants to remove the state and local sales tax from food and raise sales tax rates slightly on non-food items to recoup most of the lost revenue. The Curtis plan would give about a $37 million sales tax cut overall. Both he and legislative Democrats have expressed concerns about removing the food tax at one time, considering the many needs that exist in state government.
Both plans have considerable merit. We agree with the contention that the state needs to address some critical needs while there are sufficient resources to do it. Why not — on a one-time basis — provide $3 million to ensure Utah's most vulnerable populations do not have to make impossible choices between heating their homes, buying food or purchasing prescription medicines? People with very low and limited incomes simply cannot absorb more than 30 percent increases in their home heating bills.
The Legislature also should consider pay raises for state employees, who either have done without for a number or years or their increases have been gobbled up by higher insurance premiums. Many state employees are still stinging from the Legislature's decision in the 2005 general session that altered state workers' post-retirement health insurance benefits. Some long-time employees have been forced into retirement to preserve their health insurance benefits. This is an opportunity to extend the olive branch.
Lawmakers also should consider a tax cut, presuming most Utahns would rather have "surplus" cash in their own wallets rather than the state's piggy bank.
Obviously, the sales tax on food issue is open to rigorous debate. Happily, the debate has moved from whether to do it to the "how to" stage. If Utah's revenues remain robust, there is room for compromise between the two plans.
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