In State Of The State, Herbert Pitches Record Tax Cut While Warning Of Unchecked Growth

Gov. Gary Herbert delivered his 10th annual State of the State address on Wednesday night, calling Utah’s outlook strong despite a year of challenges that included drought, wildfires and a crippling federal shutdown.

“I am pleased to report to you tonight that in spite of challenges, the state of our state is strong, it is resilient and our outlook is very bright,” he told a joint session of the House and Senate at the Utah Capitol.

Pointing to the state’s $1 billion-plus surplus, Herbert said lawmakers now have the “enviable task” of deciding how to spend these dollars wisely. The governor endorsed House Speaker Brad Wilson’s call for a $225 million tax cut, the largest in state history, as well as a significant rewrite of the tax laws to shore up the state’s financial future.

Calling tax reform “absolutely necessary,” Herbert said the state must expand its sales tax base to better align with today’s service-based economy.

“In 1980, 70 percent of the economy was part of the general fund tax base. Today, it’s only 40 percent, and that number continues to shrink,” he said.

As an example of this incongruity, Herbert said the state still taxes buggy whips, despite no longer using horses, while other ride share services such as Uber are tax exempt.

Herbert says broadening the sales tax base will allow lawmakers to lower the overall rate by 64 percent — from 4.85 to 1.75 percent — resulting in the record tax cut he’s proposed.

The governor opened his speech with a dose of humor. It was a year ago Herbert delivered his annual address while, unbeknownst to most, he was suffering from kidney stones that required emergency surgery afterward.

“A lot of people, including my wife, thought I was out of my mind to speak in that condition,” he said. “But I reminded her of what my doctor had said: “Gary, this too shall pass.’”

Poking fun at current Washington dysfunction, Herbert said he relieved to be invited to the chamber.

“And given current national trends, can I tell you just how grateful I am that the Speaker didn’t disinvite me from delivering this year’s State of the State?” he joked.

The speech quickly veered to more a more somber tone as Herbert recounted local police and military officers who died in the line of duty.

The chamber stood for a lengthy standing ovation as Herbert recited the names of West Valley Code Officer Jill Robinson, Draper Fire Battalion Chief Matthew Burchett, National Guard Major Brent Taylor, South Salt Lake police Officer David Romrell and Provo police Officer Joseph Sinners.

Besides tax reform, Herbert hit on other budget priorities this year, including $30 million for counseling and mental health services in schools, $100 million in building and school safety upgrades and $50 million for a college scholarship fund for disadvantaged students.

Herbert said he would like to see computer science and financial literacy courses strengthened — seeing what he described as a disturbing trend of “fascination with socialism,” a frequent talking point of late among conservative media outlets.

On the environment, Herbert is calling for a record $100 million to improve air quality and outlined some specifics of what he’d like lawmakers to do with it.

“We can also create incentives for the public to pull aging dirty diesel vehicles off the road; to replace more than 5,000 wood burning stoves; and to swap out 25,000 pieces of gasoline-powered yard equipment for battery-powered options,” he suggested as examples.

Closing his speech with a distinctly anti-Trumpian tone, Herbert recalled the completion of the transcontinental railroad at Promontory Summit — marking its 150th anniversary this year — as an example of diverse communities coming together for a common good.

“White men born in America were there, along with former slaves whose ancestors came from Africa, plus emigrants from all across Europe and more than 3,000 Chinese,” he said, quoting a railroad historian.

Herbert called on Utahns to do more to protect the outcast and vulnerable.

“Even in times of deep division and discord, even when some naysayers are betting against us, great things can be envisioned and can be accomplished,” he said.

Democratic Response

Democrats released a video response to Herbert’s address this year, ditching their usual post-speech press conference.

Seizing on the Republican supermajority’s recent efforts to rewrite two voter-approved ballot initiatives, Democrats accused Herbert and Republicans of ignoring their constituents.

“The Legislature should never be quick to overrule the will of Utah voters when ballot initiatives pass,” said House Minority Brian King in a videotaped response.

“There may be even more efforts to make it harder for Utah citizens to create ballot initiatives,” King said. “It’s simply anti-democratic, not what Utahns want. It is wrong.”

Democratic leaders countered Herbert’s heavy emphasis on taxes with their own priorities for the legislative session: healthcare access, school funding, air quality and measures to reduce gun and domestic violence.

Sen. Karen Mayne, D-West Valley City, spoke directly to voters when she said members of her party “get results” for working families.

“Because we are elected to represent you, we are invested in solving problems you asked us to solve,” she said. “You sent us here to get things done, and that’s what we intend to do.”