My dad used to say, “differences do make a difference.”
The tax reform bill may have been a slam dunk for some legislators; for me it was 50/50. Sometimes a bill is a mixed bag of somewhat good or bad things depending on your perspective. This bill was full of provisions that were really good on the one hand and provisions that were really bad on the other hand. There are definitely winners and losers, and rural middle-income families are the losers.
Rural has many meanings, but for me, rural is a factor of Density, Distance, and Division.
Density is a function of square miles divided by population. An area that has 600 square miles and 13,000 people has much higher density than an area of 7,800 square miles and 15,000 people.
Distance is how far you have to travel to get to places like a major airports or hospitals, or to get to meetings for work, or to Walmart, or to a BYU vs. U of U football game.
Division means geographic features that make it hard to get from one community to the other, i.e. Lake Powell, mountains, canyons, etc.
Other factors are sometimes used to define “rural” such as average household income, percentage of the population that belong to a protected class, persistent poverty, unemployment, etc.
I use a tracking sheet to evaluate legislation. Below is how I would approach this bill:
|+/-||Weight||Score||Tax Reform Bill|
|5||20||100||Reduce income tax rate (4.95 to 4.66%)|
|5||9||45||Expand Utah Dependent Personal Exemption|
|5||8||40||Create Social Security Credit|
|-1||6||-6||Create Earned Income Tax Credit|
|-1||6||-6||Create Gorcery Credit|
|-3||7||-21||Exempt additional products from sales tax|
|-2||8||-16||Restore full sales tax on food|
|-3||7||-21||Repeal certain exemptions|
|-5||12||-60||Sales tax on motor fuel/excise tax on diesel|
|-2||10||-20||Tax certain services|
|-4||7||-28||Increase motor vehicle rental tax|
|100||7||Tax (Decrease) Increase in tax|
|100 = 100% yes|
|-100 = 100% no 0 = neutral|
A +7 would normally be a very weak yes, however, this bill is particularly unfriendly toward rural counties as illustrated here:
|Average Utah Household||Typical Urban Household||Typical Rural Household||Remote Rural $22k Household Income|
|Tax Reform Bill||Tax effect|
|Reduce income tax rate (4.95 to 466%)||-$348,000,000||-$347||-$366||-$156||-$49|
|Expand Utah Dependent Personal Exemption||-$132,000,000||-$132||-$130||-$144||-$59|
|Create Social Security Credit||-$18,000,000||-$18||-$19||-$9||-$9|
|Create Earned Income Tax Credit||-$6,000,000||-$6||-$6||-$7||-$7|
|Create Gorcery Credit||-$135,000,000||-$135||-$133||-$147||-$141|
|Exempt additional products from sales tax||-$5,000,000||-$5||-$5||-$5||-$5|
|Restore full sales tax on food||$250,000,000||$249||$250||$240||$250|
|Repeal certain exemptions||$16,000,000||$16||$16||$17||$17|
|Sales tax on motor fuel/excise tax on diesel||$170,000,000||$169||$159||$273||$316|
|Tax certain services||$43,000,000||$43||$44||$36||$36|
|Increase motor vehicle rental tax||$4,500,000||$4||$5||$3||$3|
|Tax (Decrease) Increase in tax||–$160,500,000||–$160||-$186||$101||$352|
Policy almost always creates winners and losers, which is why limited government is preferable. Good policy attempts to limit that disparity. This bill, however, takes a step that increases the disparity by dividing $5,000,000 evenly between 12 counties with the smallest population. The allocation is to mitigate a B road formula recalculation that harmed counties with roads in unincorporated areas. The more miles of B road miles the rural counties have, the greater they were harmed by the changes. Morgan county, which borders Davis, Salt Lake, Weber, Cache, and Utah Counties; which has the second highest household income in the state, the lowest poverty rate in the state, and the lowest percentage of minority citizens in the state, was already a winner in the bill. I am happy to see Morgan County get fair treatment, and they do need resources to run their county. Still they received $416,667 for their 90 miles of B roads, while Millard received the same amount of money for their 2,200 miles of B roads, and San Juan County, already a loser in the bill, receives nothing for its 1,994 miles of B roads. This money should have been allocated to all those counties in proportion to the damage they suffered from the formula change.
I voted no.
If you want to stimulate the economy in distant low-population counties, reduce gas prices. Doing so helps people get where they need to go, and helps goods get to those people at less costs. This bill does the opposite.
I am running a bill that addresses the problem of our weakest communities receiving the least resources while those counties who need it the least, receive the most resources. I represent seven of the most distant, low-density counties in the state. At times I have to use a loud voice to get the message across.
Until urban legislators recognize the problem, Utah will live below our potential as a State.
Differences do indeed make all the difference.
(Note: In my November 14 post, I rejected the premise that Utah is facing a crisis in sales tax. Nothing, so far, has convinced me otherwise, but I am open to any data that confirms that premise.)