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Update: Gov. Herbert Signs Tax Reform Repeal

Photo of the rotunda of the Utah State Capitol building.
Austen Diamond for KUER

Updated 6:13 p.m. MST, 1/28/2020

Six weeks after passing a contentious tax reform bill in a special session, Utah lawmakers repealed it Tuesday under threat of a referendum. Gov. Gary Herbert signed the repeal Tuesday evening. 

The bill to undo the hefty tax reform package passed unanimously in the Senate and with only a single nay vote from Rep. Keven Stratton, R-Orem, in the House Tuesday morning, the same day the referendum appeared to qualify for the November ballot after meeting required signature thresholds.

The Lt. Governor’s office said more than 117,000 signatures had been verified as of Tuesday morning, surpassing the 115,869 needed.Signature thresholds were also met in 24 of the state’s 29 counties, also meeting the requirement of signature totals in at least 15 counties.

By the time Herbert signed the repeal, the number of verified signatures had surpassed 130,000. 

“I commend the many legislators and people of Utah who participated so fully in this process,” Herbert said in a statement after signing the repeal. “I remain hopeful that working together we will be able to modernize our tax code and provide long-term stability to fund education, Medicaid, and other essential services.”

The governor’s signature effectively nullifies the referendum process, said State Elections Director Justin Lee.

Organizers of the referendum declared victory outside the Senate chamber after the bill’s approval. 

“I’m hoping that [lawmakers] listened and they will not go back to any of those items” that drew opposition, including tax hikes on food and gasoline, said referendum organizer Fred Cox after the repeal passed both chambers. 

“One thing about this: it has energized the entire state. People are now looking at what happens on capitol hill,” said Judy Weeks Rohner, another sponsor of the referendum. “The lion is no longer sleeping.”

Even though he sponsored the repeal legislation, House Majority Leader Francis Gibson, R-Mapleton, defended the tax law, noting that a task force he co-chaired held 18 public meetings in 2019 to discuss tax reform and gathered more than 60 hours’ worth of public comment.

“There’s a misconception that this was a rushed bill done in the middle of the night,” Gibson said. “I will fiercely defend that it was not.”

“I do appreciate the referendum process — it is a check on what we do. I appreciate it when it’s true and the manners in which we gather support for those are based on truth,” he added.

Gibson said lawmakers will “be back” to address the state’s problem, which he noted directly to Cox and other critics in the House gallery is a “distribution problem” and not a “spending problem.”

State officials say state revenue from the sales tax is not keeping pace with Utah’s growing population and demand for state services. The sales tax funds the general fund, which pays for everything outside of public education, which is funded by the income tax. The tax reform package was aimed at addressing the issue.

Rep. Joel Briscoe, D-Salt Lake City, served on the task force and said he did not regret the time spent working on the failed measure. “I learned a lot. I learned that Utahns care,” he said, adding, “I hope we remember that the people are sovereign.”

Asked about the defensive language some lawmakers used in debating the repeal, Cox said “not all legislators have learned something from our referendum. They have between now and November to learn. If the voters perceive that they didn’t learn, they can vote them out, and they will.”

What’s Next? 

Republican lawmakers have been quick to point out that what state officials say is an imbalance in tax revenue is still an issue the state needs to contend with. 

“Now it’s easy to criticize what we chose to do and to pick bits and pieces out of it, but I can assure you, we face a crisis when it comes to the General Fund,” said Sen. Lyle Hillyard, R-Logan, who sponsored the tax reform law. 

Hillyard and legislative leaders said they would not try to tackle tax reform again this session. 

Sen. Lincoln Fillmore, R-South Jordan, said that he hopes the public will be as engaged with the next iteration of tax reform discussions as they were with the referendum. 

“The best outcome from the passage of this bill and the ensuing referendum effort is how engaged citizens have become on really minute details of tax reform,” Fillmore said. “If that level of engagement from the public continues then I think we’ll have a really good process that will have a greater degree of citizen involvement than we were able to have the first time.”

Nicole Nixon and Sonja Hutson cover politics for KUER. Follow them on Twitter @_Nixo and @SonjaHutson

 

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