Gov. Herbert asks legislature to double tax cut amount from $80 million to $160 million
*Press Release by Office of Gov. Gary R. Herbert
Gov. Gary R. Herbert and the Utah Legislature jointly announce new consensus revenue estimates for the State of Utah for the coming legislative session.
An estimated $482 million in new ongoing revenues and about $200 million in new available one-time Education Fund and General Fund revenues will be available for appropriation in the 2020 general legislative session.
Legislators have already set aside $80 million for a tax cut as part of their tax modernization package.
“This year’s revenue estimates show that our economy continues to thrive,” said Gov. Herbert. “This success is due to hard-working Utahns. Our continuing efforts to find efficiencies in state government and the success of our economy have helped produce another year of strong revenues. Therefore, I am asking President Adams, Speaker Wilson, and the Utah Legislature to double the planned tax cut from the proposed $80 million to $160 million as part of the tax modernization effort.”
This additional tax cut should be targeted to help low- and middle-income families, Herbert said.
Of the new ongoing revenues, $440 million comes from the Education Fund, which is supported by the income tax. The remaining $42 million comes from the General Fund, supported by the sales tax.
One-time revenues show a similar pattern. Strong income-tax supported Education Fund growth provides $251 million in one-time revenue. But the sales-tax supported General Fund reflects a reduction of $51 million in one-time revenue, due in part to sales tax revenues coming in below projections in FY 2019.
State economists note that this shows the continuing disparity between the growth rates of the income tax and the sales tax.
“I’m glad our economy continues to remain strong and vibrant,” Senate President J. Stuart Adams said. “This is another prime example that now is a desirable time to be forward-thinking and improve Utah’s tax structure. These revenue estimates highlight the structural imbalance in the state budget we have been working to resolve. The new revenue provides us the opportunity to add additional funding to education while providing Utahns with a tax cut.”
“We are committed to ensuring our best days are ahead of us,” House Speaker Brad Wilson said. “Utah families deserve a dividend on the extraordinary success our state has enjoyed over the past several years, which will come in the form of a significant tax cut. This cut in no way diminishes our commitment to education in the state, which will continue to grow in meaningful ways through the tax reform proposal, which should be released later today.”
The governor’s team is in the process of finalizing his annual budget recommendations, which should be released to the public in early January. The governor has indicated to the legislature that he would like to see a continuing focus necessary to expand funding for education in the upcoming general session.