Tax cuts this session? House, Senate GOP divided

The Capitol in Salt Lake City is pictured on Friday, Jan. 25, 2019. | Silas Walker, Deseret News

There’s backing in House for break on Social Security benefits this session, while Senate wants to wait

SALT LAKE CITY — House and Senate Republicans were still split Monday over what to do with the $80 million set aside in the budget to give Utahns a tax cut as part of the repealed tax reform package passed last year, now that the economy is reeling from the new coronavirus outbreak.

On one side, the House GOP is backing a bill that would give more Utahns bringing in less than about $45,000 annually a break on paying income taxes on their Social Security benefits. On the other, Senate Republican leaders are saying now is not the time to reduce taxes.

House Speaker Brad Wilson, R-Kaysville, tried to minimize their differences in the final days of the session that ends Thursday.

“The House’s position is very similar to the Senate at this point, which is to keep the majority of that $80 million set aside for a rainy day. I think we would like to see some tax relief as well,” Wilson said. “We agree on about $66 million of it.”

Senate leaders continued to raise concerns about the effect of COVID-19 on the financial outlook of Utah and the nation.

“I think it makes us pause as to what kinds of tax we ought to do in the face of not knowing what is going on in our economy,” Senate President Stuart Adams, R-Layton, said, especially when lawmakers are also pushing through the latest version of tax reform, involving changes to the earmark on income tax revenues for education.

That proposal requires voter approval for an amendment to the Utah Constitution so income tax revenues can also be used for child and disabled services, as well as passage of a bill that guarantees minimum funding for schools — but only if voters pass the amendment in November.

Although there have been a number of proposals for tax cuts this session, only HB181, sponsored by Rep. Walt Brooks, R-St. George, is advancing. Brooks’ bill calls for a $16 million income tax break for Social Security recipients.

“If the economy does go down, those people that are on fixed incomes that are making such a little bit of money, that really would have made a big difference to them. It’s not a huge fiscal note,” Brooks said. His bill is scheduled to be heard in committee Monday afternoon.

Senate leaders are sympathetic, but remain cautious.

“We all want to do tax cuts,” Adams said. “We’d like to do dependent exemption, we’d like to lower the income tax rate. We’d like to do a veterans’ tax cut. We’d like to do Social Security. We’d like to do them all. We just don’t know if it’s prudent.”

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