Lawmakers Weigh Food Tax To Cope With Dwindling Revenue

Feb 23, 2017

Utah Lawmakers are talking about restoring the sales tax on food this legislative session to deal with declining revenues. Advocates for low-income Utahns oppose the idea. They accuse the state of balancing the budget on the backs of poor people.

GOP leaders are putting together a tax-reform package that includes restoring the tax on food while reducing the overall sales tax rate. The balancing act is revenue neutral for the state budget, but advocates like Bill Tibbitts with Crossroad’s Urban Center, say it will hurt middle and low-income families.  

“Low income families, food is a huge part of their budget,” Tibbitts says.  “If you’re earning $20,000 a year half your budget goes to rent and the other half you struggle to pay for everything else. And so, after you pay for transportation to get to and from work, after you pay for healthcare costs, after you pay for utilities, you don’t have a lot left for food in the first place.”

On Friday, Senate President Wayne Neiderhauser told reporters a food tax is more stable than the general sales tax on goods and services- evidenced by the sales tax slump during the recession.

“And then we’d gotten rid of the substantive predictable base, which is sales tax on food and we had to cut further into social programs, so the people we were trying to help, the indigent here in Utah were actually hurt by taking the sales tax off of food,” Neiderhauser says.

Neiderhauser says the conversation around restructuring the tax system began in part because of the Our Schools Now ballot initiative that’s underway to raise income taxes to pay for public schools.

Tax reform legislation is still being drafted.