S.B. 60 Income Tax Rate Amendments: transcript

Well, uh, I appreciate that. Um, you know, thank you. Um, just glad to have a income tax conversation. Um, just, you know, we, we talk about this a lot and there's a lot of, you know, reasons to, um, you know, that we've debated, but we have been on, as a state, we have been on a path of trying to reduce income tax and shift more towards consumptive based taxes. And that long-term mission creates a lot of things. But one, a consumptive tax is a transparent tax. It's easy to collect. It's simple, it's transparent, uh, you know what you're paying, you get a receipt, it shows what the amount is, uh, even on high-end purchases, you know what those things are on a consumptive base. When you compare that to an income tax, you don't know when you get a raise how much of that, or how you get a job or whatever. How much of that income is gonna go to, uh, to your income tax One, the compliance is actually really difficult. Foremost, uh, doing their prop, doing their income tax, um, you know, returns every year, uh, and trying to get through, you know, those issues, uh, is hard. Not only that, the state has to hire significant auditors and people, uh, to, you know, go through those returns and make sure you know, things are, are, are, are correct. Uh, believe it or not, mistakes are high on income tax. Uh, and it is hard to catch everything. So people tend to hire professionals. Uh, so it's actually one of the most expensive taxes to comply with from, uh, from that standpoint. Um, so when we look at income tax and its, you know, its purposes, it's obviously, uh, you know, it funds an important government service and we're trying to, you know, we still want to, we stay, remain committed to those, uh, to that purpose. But, and at the same time, try and find ways to make taxes easy, simple to collect and transparent. And so with that, um, you know, the, the nice thing about reducing income tax and keeping us competitive with the states around us is it does tend to attract economic development and economic growth in a way that is equal, right? It doesn't, uh, it doesn't rely on the, um, you know, the name of the company, uh, you know, or how fancy, uh, their presentation is, uh, from an economic development standpoint, which is what a, you know, an, an ed tiff type, uh, uh, presentation might look like from, uh, from, you know, from the governor's office. Instead, we're looking at, you know, everybody gets it. And when it's predictable and it's low, we stay competitive with other states and we're able to attract talent in, in those ways. And so with that, the bill, a set of Bill 60 is very simple. Um, it is a, just a simple 0.5, uh, percent, a 0.05% reduction, uh, which would then take us, as you see down to 4.45%, uh, uh, from our, uh, current rate of 4.5. We've been on this trend for the last few years of trying to, uh, to make that shift. And we're starting, you know, here at this number, obviously it's a tight revenue year, and, uh, if we aren't able to, uh, you know, provide all things being equal, I'd love to see us find a way to fund this in, in the first year at $123 million. So, uh, with that, I'm happy to, uh, yield, uh, the floor for questions. That concludes Your presentation. Yes.

Um, thank you, Mr. Chair. Um, so trying to reconcile the exercise that we're right now living through in social services. So maybe, um, I dunno how many of you guys are in that committee, but it was pretty traumatic and the public are, it's like scary the cuts on programs. So I'm trying to reconcile that message of, you know, making sure we're gonna be able to serve minimum basic services on social services. So, I, I don't wanna speak on the other committees. I'm not as familiar, I do know when it comes to executive appropriations, but, you know, the exercise of this process and having the public come. So how, um, Senator, how do you, you know, explain that when we have this new $300 million that we lost through the, um, you know, that HDR one bill, uh, federal level bill, that will be an impact of three years until it, we end up absorbing all of that stuff. So, I mean, in terms of uncertainty in that timing, do you feel this is a responsible way of approaching our, our fiscal situation when we wouldn't even know our numbers until mid-February, almost towards the end of, very close to, to the end of the session? How does that reconcile with the policy?

Yeah, it's great. Um, first of all, remember with our prohibitions, uh, you know, with the constitutional wall on income tax, income tax isn't spent on social services. Uh, and, and for the most part, when we're trying to balance those cuts, we're trying to deal with general fund dollars. You know that better than I do, but I'm helping the public, right? Yeah. Um, the, the other part too that, that's important to consider is that income tax is actually, um, after tangible personal property income tax is our highest variability tax. In other words, it has the most volatility. And when you're dealing with taxes that have high volatility, you get less certainty and less certainty means less consistent funding for programs. So when we shift instead from, uh, from volatile re revenue sources to less volatile revenue sources, we actually improve the viability of those programs, or invi improve the viability of providing those programs. So the idea really is how do we shift away from volatility and get more certainty? Um, you know, I would like to see us move more to consumptive more to property tax type components, but that's always a, a hard balance. Um, ours, the other thing I'll say is our revenue projections are based on very conservative numbers. Um, we, you know, I'm hopeful that the economy is better than we think, and as a result, our February numbers at the end of the month, we'll look better, and this will just be part of the equation or part of the conversation. But I don't know the answer to that yet. So right now, this is just a movement. And then as we're making all of those larger budget prioritization questions, we'll throw this in there as a consideration as well. But I've served on social services and I know that that is not a, an easy committee to look for cuts in. And so I, I fully appreciate that pressure you're feeling as well. Uh, and I feel them as well. So

Thank you. Thank you, Mr. Chair.

Making me choose between Which one. Thank you, Mr. Chair and thank you committee. Uh, Billy Hesterman, again with the Utah Taxpayers Association. Uh, I, I wanted to address, uh, I've already gotten questions about this from some about how Utah is doing their income tax cuts in incremental fashion. These, uh, 0.05 cuts that we've had over the last number of years. And I'd like to applaud the legislature and the governor for this. This feels like the fiscally it is the fiscally responsible way that you're attacking this, that you're bringing down the rate, but doing it in such a way that the state has a chance to react and adjust, and then to come back and do it again the following year, as you've gone about this now for, I believe it's six years in a row now, uh, we've seen over a billion dollars cut from the state budget, and that's a billion dollars that now is in the, uh, bank accounts and, and businesses of our, our families and our businesses here in the state of Utah. And that's making an impact. And it's making a difference for those who work and those who who live here. And I, I don't want to, uh, get lost on, maybe this isn't as big as we wished it would be, but I wanna say that I think it's been a, a very strategic and thoughtful way that the legislature's gone about doing this little bits by year instead of doing what we've seen in some states where they've done a big chunk and then had to come back six months later in a special session and have to undo the cut because they went too far. And so, I, I'd like to compliment the, the efforts, even though it's been somewhat maybe, uh, painful, that maybe you go to a meeting and you have a, a constituent say, well, it wasn't as big as I was hoping it would be. I hope as they look at it, they'll realize that all these cuts have added up to being, you know, anywhere from 300 to $600 a year that's back in a, a family's, uh, budget that's back, you know, there for them to, to spend the way that they choose and allow them to, uh, thrive the way that they need to thrive. And so we speak in favor of this legislation and hope that you'll continue to look for ways to, to make these cuts and do it in a fiscally responsible way. So, thank you. Thank you.

Okay. Um, my name is Kelsey Starks. I live in Payson. Um, I don't think we should be trying to return a small amount to taxpayers when the cumulative effect is much larger for my children and the local children. Um, we are, we're in a really low income area, and at our last school community council meeting, we were already talking about the 5% cut we're making and how much it's going to affect the kids that are falling behind. Um, a lot of people are really stressed about finding that 5%. Uh, our school really benefits from our extra techs and Esther professionals. And as a taxpayer, I just really would like the taxes to remain the same, to ensure that we have long-term stability for our kids. Thank you.

Thank you. My name's Jerry Schmidt. I'm the resident of, uh, Salt Lake area. Um, I just wanted to, uh, come up and, and mention that I, i, uh, sympathize and, and agree with what, uh, Senator Escamilla has been talking about. Um, I, I looked at this, uh, I just found out about it this morning and I looked at it and I saw the fiscal note and I looked at it. And next year it's talking about we're gonna be taking a hit of $133 million, and then the next year we're gonna take a hit of a hundred, $1 million. I'm looking at $234 million and thinking, what could we do with that, with social services or other services? Is this really needed? I know that there's bragging rights to say that, Hey, Utah has lowered our income tax so many years in a row consecutively and all of that. But at the same time, we're getting ready to talk about, uh, the deferral bill on circuit breaker. And the cost on that is $6.4 million. It's next to nothing compared to what we spend our money on. And so I'm wondering why we're going to be giving up $234 million when we could be helping our citizens and taking care of things better. Uh, to me it's unnecessary. So thank you very much.

Hey again, hope you're not tired of my face. Um, Brent Hutchinson, Provo resident, PTA dad. Um, and I just wanna speak again to income tax. We are proposing from going to a very fair tax income that is relative to anyone's situation. It's not too hard on the high earners, it's not too easy on the low earners, it's relative. And moving that to a consumptive tax, which hits the low income families the hardest, and a property tax, which creates huge inequalities in funding for the local municipalities where people actually live. It doesn't make sense. You can say that it's helping people's wallets, but in my experience, it makes such a small difference compared to seeing my property tax bill increase, because now we have to weigh all these costs that don't go away. Our economy is not feeling good right now. Um, you cannot look a person, honestly, in the face and say, I am doing you a service by lowering your taxes. When whole communities are struggling to find their funding because of these cuts year after year, this is nothing new. Respectfully, I oppose these consecutive income tax cuts. We have outweighed benefits when we put our resources together as a state and help each other out, rather than focusing on my personal income and my personal, um, gains, whatever, I might save those few dollars from a 0.05 reduction in income tax. So I hope you seriously consider this and the actual needs of residents in your constituency and oppose this bill.

All right. I think I'm there. Hi, my name is Stephanie Jones and this is my third year coming before you asking you not to decrease the tax rate. Exciting. What, what county are you? It's, Are you in? I'm in, um, Hiram in Kanosh County. Okay, fair enough. And you didn't say this, but I can see behind you. You're at Community Action Partnership of Utah. Is that who you're representing today? No, Just you, I'm just Representing myself. Okay, thanks. Yeah. Yes. And like I said, this is my third time coming. Um, I've struck out twice and I'm hoping that third year is the charm. Um, I am part of the middle class, and when Elon ran this bill, he put up a, a graph that showed where the benefit of this tax cut went. And it was not to those, it was not to the working poor or the lower, um, tax brackets that most of the benefit Uintah, higher earners. And, um, while it would make a little difference in my budget, I want that money in my community. I don't want my community continue struggling. Um, 'cause when we are a healthy community, it benefits all of us. And I, I ask, you know, you were asked in the opening session to do hard things, and I know voting against corporations and our highest earners is hard, but I want you to make that hard decision. And when we're asking for five, uh, 5% reduction on spending, Utah already has like the third and some say the first environment to start a business. So I don't think a reduction's warranted, needed, and I really think we need to invest in our communities. And that's what I a I asked you to oppose this.

to make a motion on your bill? Sure. I'll make a motion that we, uh, pass house or Senate Bill 60 out of the favor. Recommendation, The motion is to pass Senate Bill 60 to the floor with a favorable recommendation.

Thank you, Mr. Chair. Um, I appreciate the discussion on both these bills. Um, and you haven't lost my vote completely on yours, Mr. Chair. There's just a couple questions I have with it. However, listening to Mr. Hesterman and other people, it's easier to go through and show, you know, a rate reduction in how we're doing that year over year versus an automatic that's not as to me as transparent, as clear. Therefore, I support this one whole heartedly On one even. Alright?

Okay, thanks. I recognize, uh, that there's sensitivity to things ass funds. I, I just want, I, I was gonna pull up a graph and I'll spare everybody that at the moment, um, just realize, uh, the, the state revenue system in the last 10 years has increased on average, if you just put it over, you know, stretch it all out, just look at the averages. We're, we're on a 7.1% increase per year. Okay? Inflation over that time period is 4.2%. Okay? If you dutch it out over the same time period per year. So we have roughly had a greater than inflation 3% growth in government every year for the last 10 years. And, uh, and that's with the, the tax cuts we've already had. And so I'd say as we look at that compounding effect of an impact on, uh, on folks, we are currently 29th most competitive in the country on income tax. So 29th means there are 28 that are worse than us, but there are still several that are more competitive. And like everybody said, everyone around us has a lower, including, you know, red, blue states, doesn't matter, has a lower income tax rate except for Idaho. And so if we look at general competitiveness and we want to make a a, a equal playing field for everybody, this is the better way to do it by impacting the total rate for everyone. And so with that, uh, I ask for our support. Thank you.

Uh, thank you Mr. Vice Chair. 'cause the rules changed today. I have to present from down here instead of back there. So just here I am. So what's that? Not, oh, okay. It's not a, oh, I'm still here. Okay. Um, so this is a very straightforward bill. It's a five basis, uh, point rate cut. It would take our state income tax rate, which is of course a flat tax down from 4.5% to 4.45%. Um, it is retrospective, which basically the only time that we do retrospective ex post facto type of legislation is with an, when it's a tax cut. The only complaint somebody could say is, oh, well, I've had held too, had too much withheld now. But people don't usually complain about getting a bigger refund. It's not a large amount, but, um, it still continues our, uh, pattern of gradually reducing income taxes. The good news is that our revenue numbers came in stronger than I think people were maybe anticipating that we were just updated on last week, uh, from the legislative fiscal analyst. And while there's lots of competing priorities, this is one of the very few, if maybe the only bill that arguably will benefit every Utah, regardless of income level or, um, any other demographic factor. Again, it's not large, but I think it shows fiscal discipline on the part of the legislature that we don't spend every new dime, nickel, and penny that comes through the door. Over the years, we've been able to fund important programs while still reducing our rate very gradually. Um, which again, benefits everybody. Um, so that's the, the basics of the bill. It's actually super straightforward. Um, I'm told that it's funded, um, in the, the current layout of the budget. So that will conclude my presentation. Mr. Vice Chair.

Uh, yeah. Yeah. Thank you Mr. Vice Chair. Um, again, this is one of the shortest bills to read of the session. I hope everybody's read it, the whole thing because, uh, you can do it in less than a minute. And it has nothing about decoupling, it has nothing about any other mechanism, is simply cutting the rate by five basis points. Nothing more, nothing less. It's wizzywig what you see is what you get.

Thank you, Mr. Chair. Billy Hesterman with the Utah Taxpayers Association. Wanna speak in favor of the le the legislation and want to thank Representative Eliason. He has, uh, sponsored a number of tax cuts over the years that have, uh, been beneficial to utahns and appreciate his efforts on this one this year, and for the leadership he has and, uh, with the body to ensure that these, uh, that our tax payers of Utah are being looked out for. So I do appreciate that. Uh, also, I, I do want to address that. Oftentimes when I talk to people about the income tax cuts that we've had over the years, they'll always kind of roll their eyes and go, well, it was just a little bit, it was only such and such, you know, maybe we could go out to dinner with it. But the, you know what, as we've gone through this since 2018, to move our tax rate down from, uh, 5% now down to po, potentially this 4.45, there's a lot of dinners that we're letting Utahans go out to dinner with now. And I think that's something we can all really appreciate that we are, uh, doing this in a responsible way. We've seen states like, uh, Kansas, that have in the past made major income tax cuts and then had to turn around and undo them because it put them in a, a financial, uh, risky situation. And I would say we, we, uh, appreciate this effort, uh, more where we're doing this incrementally, methodically, year by year to allow for the state to be able to adjust to the cut and allow the economy to be able to do its part to increase revenue to the state. And so we hope we can keep on this path for, for years to come because this is the responsible way to do it instead of doing something that'll put our, our state government in, uh, financially risky situation. So appreciate the, the work of the legislature for doing this for a number of years and hope you'll continue it and hope you'll move this bill forward. Thank you.

Thank you. Mr. Chair. Yeah, you should be able just, okay. Maybe pull close, put It forward your mouth there. There you go. Yep. Thank you, Mr. Chairman. Uh, my name is Mo Hickey. I'm the Executive director of Voices for Utah Children. Uh, we stand in opposition to further income tax cuts, which we believe threatens the long-term stability of our state's most vital services. While tax cuts are often framed as broad relief, the data reveals a stark imbalance in who actually has benefited from the tax cuts. The impact on the average Utah family is negligible. While the wealthiest households have seen significant gains, as was mentioned, it's benefited all families. However, if you're a low income family, your cumulative tax cut over the past six years has been less than $117. While top 1% has been over $19,000 on an annual basis. These cuts do not provide meaningful relief to working families. They primarily serve to hollow out the state's revenue stream. Income tax revenue is the primary engine for Utah's public education. The cuts over the past six years have resulted in 1.6 billion annual reduction in revenue. While 90% of Utah children attend public schools, the stakes are incredibly high. Currently, Utah ranks near the bottom nationally and per per pupil funding, and maintains one of the highest student to teacher ratios in the country. Further cuts risk exasperating teacher shortages, increasing classroom crowding, and stripping away essential support services. Utah families are currently grappling with other systematic challenges that require investment, not this investment. We have childcare shortages. High costs and limited availability continue to stifle workforce participation. Youth mental health suicide remains a leading cause of death for Utah youth, yet access to behavioral health services remains inadequate. Statewide, repeated tax cuts weaken Utah's fiscal foundation as a fast growing youngest state in the country. Our demand for education and family services is rising. Reducing reliable funding sources increases our reliance on regressive revenue sources and puts our economic future at risk. We urge you to prioritize sustainable investments to strengthen opportunities for all Utah Children's and families. Thank you.

Yeah, thank you Mr. Vice Chair. I, I'd like to move that we pass out SB 60 with a favorable recommendation. Would you like to speak to that? Yeah. Um, you know, one, one of the reasons Utah is doing so well financially is because we're responsible with our taxes and how much we put the burden on, on individuals and businesses in our state. And because of that, we have people moving here increasing the amount of, uh, businesses that there are. Even in the year, we thought that would be, um, mediocre. Our revenue this year was increased. And, and we can, we can do all of the things that, um, you know, we can increase our help to people in need. We could, we can help schools, we can do all that and still give the citizens a tax break. And so I think this, you know, I think most people realize how I don't really like tax incentives and tax, uh, tax breaks for just small groups. And this is the kind of tax break I like where it's broad and it affects a wide range of people. So I like this. I think it's good for the health of Utah. And, uh, and so I'm in favor of this.

Uh, th Thank you. I appreciate that. Um, I appreciate all of the comments that have been made. Um, I think it's an interesting balancing act. Something that has really gotten no press that I think is actually a really big, big deal is this past year, Utah effectively became debt free. Not because we paid off our bonds, some of which are like in the 2% range, but because our rainy day accounts now surpassed the amount of bond indebtedness that we have as a state, so effectively debt free. So we did this all the while still cutting taxes. And while we know that there are, you know, lots of programs that, you know, could use lots of money, it's a balancing act between helping certain groups and benefiting the entire population of the state of Utah, which this bill arguably does. Um, everybody uses this analogy of, you know, well I'm go out to eat, you know, let's go to Golden Crow, or, you know, uh, in and out or something like that. People I work with in a, a night job, uh, with my church, these people aren't going out to eat. They're just trying to buy groceries. They're trying to make their electricity payment. And so this gives everybody a, a break. And actually, I would argue day in and day out, that 50 bucks or a hundred bucks to somebody, uh, that's, that's very low income, is a much bigger impact than somebody on the upper income scale that maybe this bill saves them 500 or a thousand dollars. So I think it, it strikes a balance. We're still funding critical programs this session from DSBD to behavioral health to homelessness, and all while still, you know, keeping our budget in balance in a fiscally sustainable way. Thank you, Mr. Vice Chair.

Thank you. I'm going to vote for the bill, but I do wanna say that I'm just concerned that we can't fund more of the list, the waiting list. I have some constituents that really do need to be funded, so I'm hoping that we can take a look next year and get some more funding in that direction. So thank you.

Yes. Uh, thank you Mr. Chair. I, I support this tax code. I think it's good policy. I think it does help everybody around. Um, one thing that I wish we would do as a body though is, uh, you know, our income, our, our taxing is, you know, the three-legged stool. And I, I think we really need to look at, at property taxes and what we can do. I know they always say, Hey, that's a local thing, but it, it really is a balance between us. Like over 50% of our property taxes are for education. And I, I think, um, I think we fund a lot of things. I, I'd like to do this and also fund less things that we do and maybe see if we can get that to our, our, our, uh, our, our people for, for property taxes. And also, um, I do think it's a good idea that we start looking at a policy to get our class sizes to be smaller. Um, we, um, I think that's, that's, that's really important for our teachers and for our students. So it's, it's kind of hard, you know, you can't, to balance all of this, it really is a balancing act. And, um, but I, I think it's something that we really need to work on is property taxes, smaller classes, sizes and, and, and lowering the property tax. So of, I mean, it's hard to do all things all, all the time, but I think we, we can't take our eye off of everything and we, we should maybe, uh, be conscious of, of maybe doing all of those things. I I think we fund a lot of things that I'd rather not fund and, and, and, and send it toward, uh, toward those purposes. So that's just kind of a comment I have. Thanks.

I, I think they're all very valid comments. And, uh, I guess this is why we meet every session to continue. I think actually it represents the juxtaposition of someone to cut more, someone to cut less. We're trying to strike a balance. This is just a small, small step, but we're not, uh, risking the health of our overall budget by, by doing this. So thank you. You

Yeah, just kinda go along with that. We could do a great big tax cut and people say, oh, that's significant. But I think over the years we've been measured, we've watched out, it's how it's affected other areas of our government. And I think we're being, um, prudent in the way that we look at this and still take care of other needs. So, appreciate that.

Thank you Mr. President Senate Bill 60 is a very simple bill, uh, has obviously ramifications. We've, uh, I'm trying to make the president happy so we can go again, again, again, again, again, be careful We don't impugn. But, uh, the purpose of the bill is that it, as it stated now, is just an income tax rate reduction right now it's a 0.05, uh, rate reduction. And that that will, uh, you know, the hope is get a second, move it to third, move it over to the house. And obviously as we continue through the budget negotiations, we will finalize whether or not we can, we can pull off an income tax cut. Um, and, uh, and, and how much? And so, uh, that's, that's really the presentation for now. We will wait and see, uh, where we go. And I'm happy to answer questions.

Thank you Mr. President. Uh, I would just like to stand in opposition of this bill. When I think about my two neighbors and home, they both are retired individuals that are now having increased property taxes, thrust upon them. And, um, when we keep cutting the income tax, we are actually pushing that burden to our communities. And this seems like, um, everybody hates taxes, but when I look at some of the bills that we have coming through this body, everybody's has a fiscal note that is attached to the income tax. And when we think about our students and how we're funding education, that's through the income tax. So in this lean year where we're asking everybody to cut their budgets, we are still required to provide services. And so I, uh, I think that many people come up to me every year and say, you know, instead of cutting my income tax by a little bit, please provide the services that my retired neighbors need. And, um, my children with dis disabilities need and my students need. So there is not one person in my life that is asking for this small cut when their services are being eroded and their property taxes are being overly burdened. So I am rising in opposition of this bill. Thank you.

Yeah, I would rise in support of this bill. I have a lot of people in my life that would love to pay less taxes. Um, some of the things that I think are really good about this is it is an incremental cut. It's a very small cut. And one of the reasons why I really like this is we oftentimes have a view, view that the Piute is only this big and it can never grow. And we think if we cut taxes, we're taking away something from everyone. But that hasn't been how it's worked out over the past in the past 10 years. 10 years ago, in 2015, the education budget was 4.3 billion. In 20 25, 10 years later it was $8.6 billion. Meaning we doubled the education budget in 10 years. And over those 10 years, I think we cut the taxes seven or eight times in that 10 year span. So we've been incrementally decreasing the income tax while increasing our revenues. And the way that that happens is because you have decreased taxes and you haven't cut too deep to where it's going way too far, but you're cutting it incrementally like this does, even in a difficult year. It increases the Piute, you're growing the economy and by growing the economy, you actually increase your revenues faster than the tax cut. And, and it builds on itself. And we're seeing the fruits of years and years of good fiscal management where we have incrementally cut taxes and still grown revenues so that those who are saying, I would like to have more services in this area or that area, are actually receiving more services in this area or that area with the highest and fastest growth rate in the history of our state for increasing those services while at the same time cutting the tax rate. And so for that reason, I speak heartily in favor of SB 60. Thank you.

Thank you Mr. President. Um, I rise in support of this bill. You know, um, I don't know if anybody else noticed, but we experienced a pretty high rate of inflation in this state, in this country over the past five years or so. And one of the key words in politics that I heard, um, a lot last year was affordability, affordability, affordability. And um, this is a bill that puts a little bit of money back into our constituents pockets. And I, I think it's, um, it would be disingenuous to say that we need to make things more affordable and then oppose a tax cut. And the, the thing that bothers me the most, Mr. President, is every time we do a small adjustment to the income tax rate in this state, I hear it dismissed. Oh, this is only $80 for the average family, or only $65 for the average family. Well, first of all, that's $80 every year for the rest of their lives. Second of all, it's $80 one year plus $80 the next year plus $80. Next year you get four or five of those $80 tax cuts and now we're up to $400 a year for every single year. This helps with affordability. Yes, the price of eggs went up, it came back down, but the price of o other things have gone up and haven't come back down. And this is one of the ways that we can address affordability. So I will be voting. Aye.

Yeah. Thank you, president. I appreciate the debate on this. I know that, uh, uh, what I'm excited is that, uh, the representative from salt, or the senator from Salt Lake County should be really excited about the next bill, which, you know, creates flexibility in the income tax fund so that it could pay for the services of the senior couple that she's concerned about in her district. So she should really like Senate Bill 65. My gut says she may not Stay, stay careful Hypothetically. So what I, I just looked at Senate Bill 60 as an opportunity. Um, you know, if you, if you looked at inflation, we have had, um, you know, as a state we've seen 7% increases in our income tax revenue. And that's because of strong management. We've been able to track companies here. We've seen salaries increase. All of those things happen. Our increasing our income tax fund. Our income tax fund is outpacing inflation. And so the way to keep managing the burden and to make sure that it doesn't increase the burden on the people that we represent is that as the economy grows, is to right size our income tax collections to match or be even, you know, to my liking, less than inflation at, at inflation, uh, numbers. Traditionally it takes between 22 and 23 years for a budget to double. Okay? We just heard how the income tax, uh, or how the education spending has doubled in the last 10, which means our rate of collection has been closer to seven 8% on the income tax level. And what that means is we're exceeding inflation, which is an admirable place to be. There are many states, in fact, I know 49 of them that would like to be in Utah's fiscal position as, as far as how we manage the budget and how we spend money on in our state. That being said, this is how we do it. Grow the economy, that additional growth then funds, uh, our education needs. And then to make sure that we manage the burden on the people, we've gotta continue to increase, decrease income tax. Remember income tax. You know, there's other states who don't have property tax. I'd love to get rid of property tax. It sounds delightful. You know, we, we will hear some considerations from the house, uh, potentially about ways to get rid of income tax. Remember those states that are proposing to get rid of income tax already have gotten rid of the income, or sorry, property tax have already gotten rid of the income tax. The reason being is income tax is the hardest to collect, and it is the direct tax on, on a person's income and a direct, uh, you know, negative impact on their success or their continued growth. In a lot of ways, income tax has problems that create a lot of negative externalities in our economy. And for that reason, continuing to minimize income tax is the objective we've had. And if somebody have said, well, what is the number? What, what could we get to? That's ultimately the goal. My goal is income tax to zero, and then we can start working on property tax. With that Mr. President, I'll move that Senate Bill 60 income tax rate amendments, be read for a third time.

Thank you President. I think, uh, we heard about affordability just now. I just think it's important to highlight that when we're discussing affordability, it's also critical that we talk about the, the services that are cut as the, uh, outcome of a, of a tax cut. And people feel that in their, in their pocketbooks, their wallets, uh, they feel the decrease in services they get from our governments. I was just talking to a group of students, uh, who were discussing fee waivers and, and this is going to, uh, continue to hurt students' ability to engage in afterschool activities and, and things like that. So, um, I think we'll also see some of these taxes get shifted down to cities and counties. It's really important to remember, uh, who picks up the tab when we cut taxes at the state level. And, and for those reasons, I will be voting no.

Um, thank you Mr. President. If I can just explain my vote. I, we just went through a very traumatic social services last, um, meeting, um, and voting on the budget cuts, the 5% that was asked by the by EAC and to see those families in pain and hurting. This is not the year to do this type of tax cuts. We've, I mean, we've been doing it for the last five years. I think it's been explained before, but we are also dealing with the loss of $300 million from the federal government and that tax cut. So I, I just will say to be cautious, um, families are hurting and they just, uh, funds cover the programs. Many of them are, um, literally life and death for many of these families. So I'll be voting No thank you.

Thank you President. I need to make a motion to get leave with the body to open a bill file.

Yeah, so the financial institutions here in Utah, the banks and the credit unions, uh, there are some national efforts to address fraud in financial services that is, uh, being deployed through social media platforms and spam calls and stuff like that. Um, if there were efforts at the state level to support the federal level, it would, it would put some appropriate pressure on Congress potentially to actually act.

Thank you Mr. President. We debated this bill yesterday. I'm happy to open, uh, just for as a reminder, this is, uh, an effort to, uh, cut the income tax again, again, again, again, again And again And again. Sorry.

President, I, I would like to, uh, make a motion to substitute,

Yeah. It's a very simple substitute. It would leave the 0.05%, uh, tax income tax cut in place, but it would then implement a, uh, surtax on folks making over a million dollars annually, uh, of 5.15%. So it would, uh, essentially make this bill revenue neutral so that our schools would remain whole. Uh, we keep hearing about affordability and, and of course on school funding. And we need to make sure that we are, uh, protecting our students and also, uh, still addressing affordability, which would this would do for, uh, for everyone in the state making less than, uh, $1 million a year. Last year I ran a, a similar bill that had some similar pieces, and I think there are around 20,000 or so Utahans, uh, that made above, uh, a million dollars. So this would, uh, uh, be a good thing for the three point however many million others of us that are not making that it would keep our school funding intact and, uh, it would, it would, uh, address those affordability concerns for the majority of our constituents.

Well, I can understand the desire to, uh, to do this. We have maintained, this is just a different tax policy. Um, this is working out, uh, miserably for the state of California that tax the rich movement, uh, where those who are wealthy are leaving the state in, uh, in, in successive order. Uh, it, it seems, uh, the senator's effort is to try and get people to leave Utah. So for that purpose, I would say that this is not a friendly substitution.

I just wanna rise in, in opposition to this amendment as well. I, I think Senator McKay nailed it. I've been watching what's been happening with California and, and frankly, it, I think it's alarming. I I think it's remarkable. We live in a state where we, we, we have good tax policy that makes sense. We have a, a solid flat tax that's fair to everybody. This takes us in the absolute wrong direction, creating different tiers of citizens in this state. It it, it's, it's a bad idea. The states that adopt it, it doesn't work. And we, I I, I've, I mean, for me, adopting a bad policy from a, from other states in this model just simply doesn't make sense.

Thank you. I, I think those concerns about other states are overblown and, uh, that we don't wanna fund ourselves in a race to the bottom here, which is what I think this, uh, is gonna drive us to do. And, uh, we certainly have all sorts of other pieces of our policy that are, are friendly to businesses, friendly to, uh, high income earners. This is just asking the absolute, uh, most well off among us to, to help out our schools, uh, and to still, uh, leave in place this tax cut for the vast majority of Utahans, who will then be able to, uh, contribute their 45 or so dollars, which is the average amount that folks are gonna get back, uh, back in and, you know, hopefully frequent a, uh, local restaurant for a a, a burger or two.

Yeah, thank you. Um, are there any other, I, I think we're questions. I don't see any other, I made Presentation.

So how much will school districts have to raise property taxes to make up for the difference?

Senator McKay? Zero.

So I've been talking to multiple school board members who are saying that they'll have to raise it, uh, 2.2 increments. And for my house, that would be $680. And in my opinion, that's not worth the $45 savings for income taxes. That a, is that a question?

So I hope you'll realize what a trick that is. Okay. And I'll just offer this as, as a trick. The school district folks that are talking to you are telling you that they need to raise your taxes $680 million to offset a 40 million a a $40. Sorry. They need, they need to raise property taxes $600 per household to make up for a $45 income tax cut at the state. I am not a mathematician, but I will tell you the alligator eachs one of those numbers, and it isn't 45. And in my experience, this is what happens with this debate is folks want to try and scare us as this is not, you know, good for the budget. It's not good for the revenue. We've gotta raise property tax to offset it. My response to them though, is we have record revenues in our income tax fund because we are growing as a state. We are the number one state, economically. Everyone wants to live here. We have so many people that are coming to Utah. We have the most productive economy in the country, the greatest upward mobility. And the way that we do that is being competitive. Our income tax rate is falling off in competitive. We are now 29th as we are ranked among the states. And if we do not continue to, you know, decrease our income tax rate, we will fall behind our other states and lose the attractive advantage we have or the competitive advantage we have in this state to attract talent and to attract investment. The fact that people want to be here is a big issue. The reason our areas is growing the way they are is because people want to be here. So the question we just need to ask ourselves is, is this right From an income tax perspective, if the locals feel like they need to raise a property tax as a result, that is a separate equation that they have to do. But if I were living in that district, I would be concerned about their ability to do math.

Um, I was just gonna say that if the property taxes make homes so unaffordable, I don't know how many people are going to be able to live here.

Uh, thank you, Mr. President. I, uh, it's interesting to have this debate and it's always kind of a bugaboo that has bothered me. Uh, uh, you know, whenever we talk about this, you know, we pretend that a cut in income tax is equivalent to a cut in education funding, but of course it's not. It does not reduce the amount of funding that's available for education. We can spend any dollar we want to on education. In fact, I would just say this morning, the Public Education Appropriations Committee finished its budgetary work and, uh, counting what we did in that, uh, committee today. And what we have done in the base budget already, public education will be receiving $190 million funding increase to increase the value of the weighted pupil unit by 4.2%. Teachers are going to be receiving $44 million, uh, this year in additional time for, uh, for additional professional, uh, preparation and development days. CTE programs, uh, were prioritized another $35 million on top of the a hundred million dollars that we have already allocated. Uh, we are not under funding education this budget year. Uh, I, what I have just detailed is nearly $300 million in new funding to public education. Um, and the fact that we are in a position where we can do that much plus, the more that IIII didn't mention here, uh, and be in a position where we can look at giving further tax relief to Utah families, you know, that from whom we are already taking $12 billion a year, uh, that's a great position for Utah to be in. Uh, we can walk and chew gum at the same time and we can cut taxes and fund education at the same time.

Thank you, Mr. President. Um, we have spoken frequently about having the best economy in the nation. And I, I think that's great. And I think our population has increased tremendously, which we have, you know, have some growing pains for that. And so when we think about cutting the income tax, we haven't cut the income tax again yet. And people are still coming here in droves. And when you look at the reason why most people are coming here, fourth on the list is our tax rate, but prior to that is quality of life, outdoor recreation. And those things require infrastructure and supports. When we think about what's gonna happen when we start cutting our income tax further, we think of fiscal deficits and revenue losses, not just for education, but to deal with the 30 year waiting list we have for people with disabilities. When we think about the homeless wandering our streets, this is where we need those income taxes for. We think about increased inequality. We have a gap of the haves versus the have-nots that is unprecedented. The people at the top are making more money at an exponential rate than the people at the bottom. We think about weakened public services. We talk constantly about our homeless crisis that we are dealing with here in the state of Utah with limited resources. If we pass this income tax, we think about inflationary pressures, we think about reduced compliance and ineffectiveness of trickle down. The people that are benefiting from this income tax reduction are not the people that need the help. So I understand that education has received what they need, and we are continuing to do great work in education. But when I think about the bills that are being passed here, a lot of them are spending the income tax. And you're asking us to dedicate income tax to your projects, and yet you're cutting those income taxes. So as I look around the room, if you are running a bill that requires income tax funding, are you willing for your bill to not pass? So I am opposed to this bill because I think there are still a lot of work to do. We have a ton of people moving into the state of Utah and they're still moving here. So I don't think this is gonna benefit the most of us to the point it's gonna benefit the few. Thank you.

Yeah. Thank you. Yeah, I appreciate the lively debate and conversation about this. Um, I would love to have this funded over all the education, uh, initiatives outside of dealing with our, our growth and teacher salary, et cetera. But that's not up for debate. Let's just talk about where we are in Utah for just a moment. We are, we have a budget surplus this year. Uh, it's not a big one, but it's a budget surplus. And I mentioned all the ways we're number one. And I, I know president, if I turn the microphone over to him, he could list the 12 to 15 different ways that we're number one. 'cause he hasn't memorized and lives by them. The one thing I I will say is, is look at our neighbors Idaho $25 million budget deficit this year. Nevada $191 million budget deficit this year, Colorado 850 to a billion dollars budget structural deficit this year. Arizona, $1.3 billion budget shortfall for this year. Think about where our competitive set is from a colleague standpoint around the country. Okay? And think about where we are as a state. Our problem is one of abundance and surplus because of the investments we've made economically in this state. Every dollar that goes to a Utah family and is returned to a Utah family is a money that is placed into their family. It's an investment in their, in their jobs. It's an investment in their homes, it's an investment in their communities. All of those things. And it is why you see us consciously trying to find ways to reduce regulatory costs, regulatory burden and cost of government so that we can continue to be competitive and not deal with the issues that they are dealing with in other states. So for that reason, I feel like a moderate cut, like this is something we ought to continue to be pushing to continue our competitiveness and also to celebrate our abundance and share it with our taxpayers. I wanna take one last umbrage with something that was said, uh, during the substitutes debate. You know, The sponsor mentioned that we were going to ask people who are making over a million dollars to contribute to our education. The last I checked, you can't really ask people to participate in a system that can foreclose on their home, that can take away their livelihood, that can put 'em in jail for failure to pay taxes or whatever it may be. That's not how you ask, right? You ask politely. You ask by charitable giving, we are the number one most charitable state in the country. You ask those ways. That's how you ask. You do not ask with mandatory government fees or unneeded income tax. And so with that, Mr. President, I ask, I'm looking around, we should be enough. Uh, I ask that Senate Bill 60 pass.

Uh, thank you Mr. Speaker. Uh, this bill is yet another tax cut, just like the last one. Only, this one's a little bit larger. Um, this is, uh, a five basis point, uh, rate cut. Uh, Utah has had, the legislature has had a very, uh, strong record of reducing taxes, uh, while at the same time making sure that, uh, our important components of government are funded. And this is a, a, a modest step I'd like to mention for, for individuals that say, well, 45, 50, a hundred bucks, 200 bucks, that's just enough to go out to dinner a few times. I will say the people I work with in my night job that are living from paycheck to paycheck, every penny counts. And while on a percentage basis, um, or a raw dollar basis, this may be a larger tax cut for somebody in a higher income bracket. The dollars I would submit are actually more valuable to individuals that are in a lower income tax bracket and living, you know, kind of from paycheck to paycheck. One very important point that I want to make is that Utah just recently became, uh, basically debt free in the term sense that our rainy day funds now exceed our total indebtedness. So on a kind of an accounting basis from a, a net debt compared to cash reserves, uh, we've been very fiscally responsive. So for those that say this is fiscally irresponsible to cut taxes, we've been able to build our rainy day reserves. Fund growth and education state employee raises critical programs for people with disabilities, as well as cut taxes. So trying to address a few of the concerns that may have been raised in my presentation. But in sim, simple terms, this is, uh, uh, takes us from 4.5% to 4.45% for our state income tax and keeps us moving in a very positive direction in terms of reducing the burden on every Utah and every court company that pays taxes in Utah. Thank you, Mr. Speaker.

Yeah, thank you Mr. Speaker. I really like this bill. I think that, uh, it reminds me of some other bills that we've discussed, but, uh, I'm, I think that the Senate and the House are on the same page here. Thank you.

Uh, thank you Mr. Speaker. Um, I pe people can have different opinions on this bill, but I think it's important to note that Utah doesn't spend every dollar that we take in because of growth. It's only because our economy is so strong that we bring in incremental tax revenues. So I think it's a measured step of fiscal restraint to control the growth in terms of our tax rate and make incremental, uh, lower lowering our rate incrementally for the benefit of all Utah citizens. Thank you, Mr. Speaker.