Business tax cuts dried up in legislature
But Huntsman and legislators did an about-face in their 45-day general session.
Instead of businesses getting $60 million to $80 million in tax cuts — amounts talked about early on — local firms received slightly less than $20 million. And that was after legislators were told they had even more money to spend than the original estimates of slightly more than $1 billion.
Two of the so-called "economic development" bills that passed are actually a $5.5 million pass-through to many electrical utility customers and an increase in the senior citizens, low-income property-tax exemption — items that have little or nothing to do with helping local businesses grow.
"Yes, two of our (business development) bills didn't make it — not part of the (tax cut) compromises between House and Senate leaders," said Rep. Wayne Harper, the co-chairman of the 2005 Legislative Tax Reform Task Force.
The task force was talking last fall about letting Utah-based corporations get a new way to figure their corporate income taxes (a $31 million cut in Harper's HB53) and extending the current manufacturer's sales-tax exemption on new and replacement parts to more industries (a $44 million tax cut in Sen. Howard Stephenson's SB33), even after the sponsors of those bills rewrote them to give much smaller tax cuts. In the end, both bills died.
A year ago, Huntsman was pushing a complete repeal of the corporate income tax, a move that over time would have cost the state more than $200 million in lost revenue.
This year, the governor gave lip service to some economic development tax cuts, but put his political muscle behind removing the sales tax from food (a $166 million cut that passed as a whittled-down $70 million reduction) and "reforming" the personal income tax (a $70 million proposal that now will go to a spring special session).
Adding insult to injury, legislators in the final days of the session even slipped a $580,000 increase in the current Circuit Breaker law — which gives property tax breaks to low-income senior citizens — into the $20 million set aside for business tax cuts.
In the House GOP caucus, when that bill, HB52, showed up on the possible business tax-cut list, one representative asked what it was doing there — because it didn't help businesses.
"We're just putting it there," said Harper, the sponsor of HB52. Fellow Republican House members laughed, and the discussion quickly moved away to another topic.
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