Are You Paying More Taxes in Utah?

The Utah establishment and their friends in the media didn’t like that I called out that we’re paying for a blowout blue-state budget that has grown from $21 billion to $29 billion during Governor Cox’s first term by raising taxes. 

One of the first things Governor Cox did after being elected was hire former Salt Lake Tribune editor Jennifer Napier-Pearce as his senior advisor of communications. She has done a masterful job of ensuring that Utah’s media establishment continues to operate as a dutiful public relations appendage to the state government. 

So I wasn’t surprised at all to learn that KUTV’s Daniel Woodruff is scouring my campaign emails to practice his uniquely unbalanced and dishonest brand of gotcha journalism. The last time I spoke with this reporter, I told him it would be the last time I would speak with him. He’s built his career as a mouthpiece for Utah’s statist media. I’ve built my career fighting for the people of Utah.

He was particularly incensed that I dared suggest that my colleagues in the legislature and Governor Cox had paid for soaring government budgets by aggressively raising taxes. He published a story to indicate that I was lying about this claim. While I don’t care to defend my claim to Mr. Woodruff, I will defend my claim to you.

As an accountant, I have a front row seat to observe how unchecked government fiscal policies have been impacting the finances of businesses and families. I can say unequivocally, that if you’re wondering who is paying for an additional $8 billion dollars in government in Utah, it is you – the taxpayers of Utah.

Here’s a breakdown of how you’re paying more taxes to cover the cost of this growth in government spending:

Inflation

While inflation is primarily caused by the fiscal and monetary policies of the federal government, Utah has created the demand for federal spending by sourcing 30% of its state budget from federal dollars. Monetizing government spending is the easiest way to aggressively confiscate the wealth of a people without ever having to technically “raise tax rates.” As an added benefit to the government, sales tax, property tax, and income tax bases are boats that all rise along with the rising tide of inflation. All of this fuels a reckless upward spiral that is paid for by Utah families and businesses, which are the sinking ships in this picture. While Utahns might not feel like they’re getting ahead, the government is certainly not being left behind.

Autopilot Tax Increases

The best way to increase taxes without having your fingerprints on the tax increase is to pass the tax increase years ago and codify automatic future increases into the law. This is exactly what Utah did with the gas tax back in 2015. Our gas tax is programmed to index to recent gas prices, so according to the Utah Taxpayers Association, Utahns saw their gas taxes aggressively raised by 14% in 2023 on top of the built-in increase that came from inflation at the same time they were needing to find room in their budgets for record high prices at the pump. Even California found ways to provide gas tax relief to its citizens – but not Utah. We just let the automatic tax increases kick in, then we increase the state budget. 

It’s also worth noting that as home values have soared in Utah, property taxes have soared right along with them. While it is true that as property values have fallen back down that taxes have come back down for some, it is wrong to assess taxes against an unrealized capital gain on an asset. Those currently serving in the Legislature and Governor’s office didn’t create this long standing problem, but they’ve done little to fix it. As a result, during recent years most Utahns can probably point to large increases in their property taxes. The rates might not have changed, but there’s less money in your wallet and a bigger government to show for it.

Public Private, “Authorities”, TIF’s, and Special Service Districts

I will not go into great detail here because there is a whole underworld of hidden taxes that hide in these types of organizations. IYKYN. Also, these districts, authorities, and partnerships are usually very important and personal to the handful of people that create them. Starting to name a few would not be fair and naming them all would not be possible.

Utah has seen a huge proliferation of special service districts, most of them created for laudable purposes. Many of these can be essential to the proper form of government, but there is virtually no end in sight for their creation and it seems the fees and taxes they impose increase much more often than they decrease. We have some prominent ones like the Point of the Mountain State Land Authority, https://le.utah.gov/~2018/bills/static/HB0372.html,

the State Fair Park Authority https://le.utah.gov/~2023/bills/static/SB0187.html,

or the Utah Lake Authority. Again, I am not condemning or condoning any of these creations, only pointing out that they exist and that they increase the tax burden for taxpayers.

Abusive Licensing Fees

I recently received a copy of Clearfield’s new business license structure. When a business license goes from $64 to $4,401, that is a burden. https://www.fox13now.com/news/local-news/clearfield-business-owners-shocked-over-license-fee-increases.  I am not saying this is the direct product of the legislature or the governor, but it is the kind of thing that the state government could rein in if it chose.

Utah Taxed PPP Grants

It was a mistake to shut down the American economy for weeks. The PPP business loan program was a flawed response to the even worse decision to shut down America. Despite this, the IRS ultimately decided that PPP loans would be treated as untaxable grants. Utah, on the other hand, decided to tax PPP loans. So, after shutting down your businesses, our state government decided to tax the marginal relief you received from the federal government. 

What About The Largest Tax Cut in History ?

Not surprisingly, even suggesting that Utahns are overtaxed triggers the chorus of cheerleaders who want to celebrate the “largest tax cut in history” that was passed in 2023. To be fair, I’m one of those cheerleaders, who will celebrate any tax cut. The 2023 income tax cut amounted to a $129 dollar annual benefit to a middle-class Utahn. My sincere question to Utah taxpayers is “what did you do with your extra $10 a month?” 

Did you use it to pay for the increase in the gas tax or your property tax? 

Even with a tax cut that returned $10 a month to your pocket, we have a lot more work to do to improve our status as the red state with the bluest tax burden (In 2022 Utah had the 11th highest tax burden in the country, and the ten states with higher tax burdens were all blue states).

With a 35-year career in public accounting, I am no stranger to the games that can be played with numbers. While I give credit where credit is due,  I will always be trying to make the point that taxes are too high, that the government is too intrusive, and that honest people need representatives that fight for them.