Saturday the Daily Herald published an Opinion piece from Mike Jerman, VP of the Utah Taxpayers Association.  In his surgically accurate thesis on why fees like Higher Ed tuition should be included in the computation of Utah Taxpayers’ overall tax burden, Jerman expresses his conviction that “fees should be included in tax burden analysis since governments frequently increase fees in order to avoid increasing taxes.”  Jerman’s thoughts on this topic were prompted by some misrepresentations and inaccuracies published in THIS recent article in the Herald.

Just A Thought:  Has the Utah Taxpayer’s Association also included Constitutionally approved Secondary Education Fees (grades 7 through 12) as part of the overall Tax/Fee burden computation?  Remember this POST?!  Just try to get your students’ grades if you haven’t paid those fees!

Here’s an AP Article about Blogging in Utah Politics.  Click HERE for link.

The blog has certainly enhanced, to a very small degree currently, the ability for some in the ”spotlight” to communicate their agenda (i.e. public agenda, private agenda, and/or global agenda).  For this reason, the blog is used for a number of different purposes.  Corporations use the blog for timely world-wide communications and answers to FAQ.  Religious organizations have used the blog for creating an open forum for gospel and ecclesiastical discussion.  Educational institutions use the blog to enhance academic freedom through uncensored dialogue.  Still further, mom’s use the blog to record family history by documenting daily familial events.  The blog has become…well…whatever one wants it to be.

Print Media Is Messy…and, Not Environmentally Friendly 

The print media world, recognizing the potential power of the blog, have succumbed to using the blog for a secondary news source to post the personal opinions of staff, writers, and editors.  In a traditionally “we-report-you-decide” atmosphere, the blog has given reporters the venue to formulate opinions of their own and come to personal conclusions–all for public censure.  Blogging for reporters becomes the ultimate exposition of their personality–not so much how they write, but who they really are and what they actually think.  For example, by reading the Tribune’s Blog, one sees that some of these reporters go beyond restrictive editorializing and appear to actually have and express a sense of humor…underdeveloped as they might be…but, nontheless, real wit!

I’m still looking into the D-News…

The Senate Site (Blog) 

Ric Cantrell does a fabulous job managing and writing for the Senate Site blog.  He’s among the best and represents well the musings of that august body from the “other side” of a our state’s bi-cameral house.  Ric deserves…and I’m giving credit where credit is due…a big raise a bigger office more time off a faster internet connection KUDO for keeping on top of this time consuming and at times thankless job of maintaining what has become one of my primary sources of Legislative information and commentary…oh, and also an occasional gardening tip or two (thanks Senator Hillyard).  Way to go Wolfman (Cantrell not Hillyard).

BI-CAMERAL BY NATURE…And It’s OK

Equally arrogant, a bi-cameral house creates by its very structural nature the desire (and determination) to be different. 

Not uncommon is the FACT that the House and the Senate as separate and distinct bodies find themselves with differing opinions regarding critical (and sometimes not-so-critical) issues.  For example:  The House, in the past favored the removal of sales tax on non-prepared foods.  There has been further discussion about the potential removal of sales tax on non-prepared food by the House this coming year–just discussion.  The Senate although somewhat supportive of a partial removal of the sales tax on non-prepared foods in the past has recently expressed its concern about further reductions to this sales tax component.  That’s OK.  Let’s hear it for internal checks-and-balances.  The majority of each body must determine philosophically what is best for the citizens of the State of Utah.  And with limited fiscal resources (I know that’s not what the papers are reporting) its important to have a vigorous and thorough debate on this issue.

THOROUGH DEBATE

A thorough debate happens on a number of different levels and in a number of different places.  It happens in Committee Rooms.  It happens on the House Floor.  It happens on the Senate Floor.  It happens in the Governor’s Office.  It happens in the hallways outside Committee Rooms.  It happens in the Speaker’s Office and in the President’s Office.  It happens in the Lobby.  It happens in the breakroom.  It happens in Public Meetings.  It happens in the Print Media.  It happens in the Broadcast Media.  It happens on the Internet.  And, yes Virginia, it even happens in the blog.

My Opinion

Everyone has an opinion and everyone is entitled to a Constitutionally protected opinion.  I’m no exception.  Just remember one thing as you read my posts…This Is Just My Dumb Blog!  Nothing else.

STAY ON THE CUTTING EDGE OF KEY LEGISLATIVE ISSUES.  The Office of Legislative Research and General Counsel has just released a 4 page summary “report” on what should be a few of the critical issues raised during the 2007 General Session of the Utah State Legislature (beginning Monday, January 15).

Don’t get left behind…click HERE!

The Utah Taxpayers Association Blog has a great piece on Governor Huntsman’s Proposed Tax Cuts.

 Click HERE for link.

I take back all the ugly, mean, hurtful things I’ve ever said about Sen. Bramble…well…at least most of ones I can remember.  Anybody who really understands Curt, knows he has a soft heart for non-self-interested-morons…it’s just inside his left rear trousers pocket at times.  (I know about the BCD in Fiji, too.)  Matt. 6:4

Click HERE for the Warchol Blog “St. Brambo of Stranded Liberals”

I told you the posturing “games” have already begun…and just in time for the Holidays!

It’s Not Unlike A Sword Fight

Whilst in swordplay, the sabre is my weapon of choice, razor sharp on edge, slightly cambered, and fashioned to a fine tip.  To hell with the quip that “the pen is mightier than the sword.”  The person who believes that gobbledygook has never held a finely balanced hand-crafted sword.  A blade which falling under its own weight would without effort divide a torso in two.  It makes me shiver just to think of it.   (The Frankein Journals)

The House Majority Caucus Position

Well advertised is the fact the House Majority Caucus has taken a position of $300M in tax reform/cuts for this coming year (coupled proportionally with new education spending).  Not as well known is the fact that the House Majority has NOT taken a position on the “mix” of tax policy changes associated with the current caucus position.

The recent implication by the other body, as stated on their Blog, is that the House won’t be prudent in its approach to providing further relief for the over-taxed citizenry of our state.  Remember, BIG SURPLUSES of $1.5B last year plus $1.6B+ this year equals OVER-TAXATION.  

Fat cats rarely worry about where their next mouse is coming from.

Utah Is Stable

True, Utah has a AAA bond rating.  Bravo.  Other than a Blogger, ask someone who knows how that rating is actually calculated and what criteria is used to determine a state’s solvency.  So much more is considered than just the state’s mix of taxation (e.g. rainy-day fund levels–Full, employment levels–2.6% Unemployment, etc).  The senate’s argument in this regard is nothing less than a spending smoke screen—a momentary attention diversion device.

According to a recent Utah Taxpayers Association article, Utah ranks 4th in the Nation in individual tax burden.  We’re at the top!  But this top is not where we want to be standing.  There is room for improvement through further reform—sales tax removal on non-prepared food is just one of several potential considerations.

Sales Tax On Non-Prepared Food Is A Regressive Tax

Mom and dad moved up from California a year and a half ago.  Just after they arrived, we were sitting down to one of our bi-weekly Sunday evening family dinners when my dad broached the Sales Tax on food topic.  I could tell he was agitated.  You see in California, there’s no sales tax on food!  Nada, nunca.  He suggested that if we were going to tax consumables that maybe we also find a way to tax people’s gardens, too!  I told him I’d look into it.

My parents are “retired,” living on a fixed pension from my dad’s employment at a public utility for 27 years.  Food tax is regressive for those on fixed incomes (annual inflationary factors cause more disposable income of the retired and the poor to be spent on necessary consumables such as food and healthcare, etc.).  The food tax is a good place to make cuts because it reduces tax burden for everyone across the state.  The further removal of sales tax on food (2.75%) of the state’s portion (not addressing the local food sales option) is a miniscule portion of the overall retail taxes we pay.

In a couple of weeks, January 1st 2007, we will remove nearly half the state sales tax component (2%) on non-prepared food costing the state’s General Fund only $70M out of this year’s $10,700,000,000 (Governor’s) proposed FY08 budget. Will we miss the money?  My guess is…nope!!!  Remember, we have a $1,600,000,000.00 surplus to distract us.

REMEMBER WE’RE ONLY TALKING ABOUT THE SALES TAX COMPONENT ON NON-PREPARED FOODS—LIFE SUSTAINING BASICS.   THE STATE GOVERNMENT HAS NOT MANAGED TO EXTEND YOU A BREAK ON OTHER GOODS PURCHASED AT THE RETAIL LEVEL.  AND, DON’T BE THINKIN’ YOU’LL BE GETTING’ A BREAK ANYTIME SOON ON THOSE TASTY, FAT-FILLED, DEEP-FRIED PREPARED FOODS—YA’ KNOW THE ONES THAT ARE SEVERLY ADDICTIVE?!

We Tried To Take It All Off

The Utah League of Cities and Towns expressed their concern last session over the removal of the total tax on non-prepared food because it would have taken coveted local tax revenues from county and municipal coffers (local portion, local options or boutique taxes, RAP, ZAP, etc.)  Heaven forbid!  Then someone proposed shifting the sales tax deficit from the removal of sales tax on non-prepared food by increasing the local property tax burden—creating what some affectionately term “revenue neutrality.”  Needless to say, the power of the lobby overcame the option and the local tax component and options remained.

There’s Plenty Where That Came From 

Utah’s economy will not become “unstable” because the Legislature removes an additional 2.75% of the state’s portion of sales tax collected on non-prepared foods.  On the contrary, it is the tendency of the food purchasing public—everyone—to take their tax cut dollars from additional reform (disposable income) and re-inject those dollars immediately into the local economy by spending it (remember the Bush tax cut—mine’s gone, how about yours?…see what the effects of that tax rebate had on our local and national economies).  Removing the remaining State Sales Tax component (2.75%) on Non-Prepared Foods will not damage our state’s economy—and, heaven willing, the Senate will be no worse for the wear.
Parry…thrust… 

Upcoming Podcasts at underthedome.org:

As the 2007 General Session of the Utah State Legislature draws closer, underthedome.org will provide podcast coverage of the critical issues addressed day-to-day on Capitol Hill. Representative Craig Frank will keep you up to date with the latest news and information from Legislative Leadership and Chief Sponsors of high-profile bills.  Get all the information, fast & unedited. 

Now, before you express concern about the House Republicans taking a position at $300M new spending on Public Education Only, you need to understand a few critical things.

First, $300M New On-Going money is $15M more than we have in surplus dollars for Public Education (or ALL education for that matter).  Of the $762M in Total On-Going money, $285M is the On-Going money in the “Education Fund.”  [Note: The Education Fund, funds both Public Ed K-12 AND Higher Ed]  The remainder ($477M) of the On-Going surplus dollars are General Fund monies, and by statue, are “earmarked” for other purposes.

Second, If the Legislature “earmarks” $300M in On-Going surplus dollars exclusively for Public Education funding, it represents an increase of 8.8% growth in the State portion of Public Education funding over FY2007.  And, if you add last year’s State Public Ed growth of 12.8% to this years House commitment of 8.8% dollars from On-Going surplus it equals 21.6% Public Education growth two years running.  That’s substantial growth.  Just imagine if your personal household budget grew over 20% every two years. 

Third, we haven’t even begun to consider the One-Time surplus monies “earmarked” for Public Education.  The amount, you ask…$554M.  [Note: It is the general philosophy of Legislative leadership NOT to fund On-Going programs and projects with One-Time money! -- this is sound fiscal policy if kept in practice.]  Out of the Total One-Time surplus monies of $805M, $554M is in the Education Fund and $251M is in the General Fund.  (General Fund money is “earmarked” for genral fund administration projects and programs, by statute.)

Finally, (since everyone seems to think this is A RACE between the 50 states) by spending $300M in On-Going surplus money for Public Education (holding all 50 state current data constant), Utah can pass #50 Arizona in Per Pupil Spending.  Although, Utah can pass #50 Arizona in Per Pupil Spending, Utah cannot pass #49 Arkansas who spent $6,202 per student (in 2005).  Utah would have to spend $488.1M in additional On-Going money to move from its current 51st position to catch up to #49 Arkansas.  To get to #48 Oklahoma…$522.3M…#47 Mississippi…$615.6M…#46 Nevada…$652.8M…and so forth.  To WIN the RACE…Utah would have to pass Washington DC.  And, WHAT’S THE COST OF WINNING THAT RACE…$5,012,397,936.00 (rounded up to the nearest dollar) PER YEAR IN ON-GOING MONEY!  Five Billion Dollars!  The PROBLEM with being in THIS RACE…everybody else in this race is “running,” too.  #50 Arizona, will undoubtedly increase its Public Education spending this year pushing UT back into 51st place once again.  (They have a surplus, too!)  And, Oklahoma, Mississippi, and Nevada will increase their Public Ed spending simultaneously…once again forcing UT to finish last in this race of inevitable perpetuity.

How much money is ENOUGH?  Since it is YOU and I that pay the Public Education bill through 100% of our Personal Income Taxes (and on a local level approximately 67% of our property tax bill), how much more are we willing to spend to get Utah’s Public Education “adequately” funded?  Maybe I can help you with that answer by asking you to participate in a little exercise…

A LITTLE EXERCISE

[Note: This exercise is much more FUN and REALISTIC if you ACTUALLY go through the motions--Try It!]

Reach into your back pocket, pull out your wallet (or purse), open it up, grab all the dollars out of it you want to go to increase Public Education spending, stuff them in an envelope, place the appropriate amount of postage on the envelope (that will depend on the weight of the money you’ve placed into the envelope–no coins, please), before you seal the envelope, slip a little note in there that says you want this money to go to Public Ed, address the envelope filled with your money to THE UTAH STATE TAX COMMISSION, 210 NORTH 1950 WEST, SALT LAKE CITY, UTAH 84134, grab your keys, get into your car (don’t forget your envelope), and drive down to your local post office.  Now, get out of your car, take the envelope filled with the extra Public Education dollars and walk over to the mail box.  Open the front of the mail box…this is where it starts to get difficult…holding tightly to the envelope, place the letter near the opening of the mailbox…AND…now I’ll let you decide what to do with it from this point.

Oh…and…you have to be “willing” to participate in this exercise every year.

Did you enjoy the EXERCISE? 

Each year as the Tax Comission collects “extra,” surplus dollars from the taxpayers of Utah, we in reality go through this little exercise…with one exception…as you are standing there at the mailbox with your arm outstretched contemplating the absence of that hard earned cash, somebody from inside the box grabs the letter from the other side, and…POOF! It’s gone.  (Remember, possession is nine-tenths…) 

Each year, we, the Legislature AND the Taxpayers of Utah, must thoughtfully consider a critical question…HOW MUCH IS ENOUGH?  SO…HOW MUCH IS ENOUGH THIS YEAR? AND, NEXT YEAR?  AND, THE NEXT?  HOW MUCH DOES IT TAKE EVERY YEAR TO ADEQUATELY FUND PUBLIC EDUCATION? 

From “Table 34” in the 50 STATE COMPARISONS, 2006 Edition, published annually by The Taxpayers Network, it appears as though Utah’s 2005 national ranking for “Public School Expenditure Per Pupil,” is once again 51^st of all the states (table includes Washington DC). 

In 2005, Utah spent $5,245 per pupil overall.  This number reflects a $229 lag behind #50 Arizona, who spent $5,474 per pupil AND $3,373 per pupil behind the National average of $8,618.  Washington DC, is ranked #1 in per pupil spending at $15,073 ($9,828 above Utah).  (50 State’s Comparisons)

Utah’s population estimate for 2005 was 2,469,585 (50 State’s Comparisons)

Utah’s 2005, K-12 student population was 510,012—20.7% of total population (LRGC)

Approximately 1,000,000 “households” filed Personal Income Tax forms for 2005 (some are married filing jointly).

So, let’s run some numbers to get us out of 51^st position:

To get Utah from 51^st to 50^th, 1 Million “taxpayers” would have to fork over about $116.81 each per year [$229 x 510,012 / 1M], and…

To get Utah from 51^st to the National Average, 1 Million “taxpayers” would have to reach into their wallets to the tune of about $1,720.28 each per year [$3,373 x 510,012 / 1M], and…

To get Utah from 51^st to #1, 1 Million “taxpayers” would have to cough up a grand total of about $5,012.40 each per year [$9,828 x 510,012 / 1M].

So, here’s the problem…education funding in Utah will never be…well…enough.

Utah House Republicans have committed to putting an additional $300M in “extra” money toward Public Education funding.

The House Majority, during an all-day caucus meeting yesterday, took a position on what to do with a large slice of the on-going portion of the approximately $1.5B surplus.  What $1.5B surplus you ask?  The New One!  Utah has a new surplus for the coming year’s budget.  The position you ask…

The House position is to “earmark” $300M for increased Public Education Funding and $300M for Tax Reform/Tax Cuts.  These two figures reflect a total of $600M of the currently projected $762M on-going budget surplus estimated by the Office of the Legislative Fiscal Analyst.  One important note (a caveat): these two numbers are inseparably linked together—married, “yoked equally.”  And, any change to either one of these figures, increase OR decrease, has a reactionary, proportional rise OR fall in its corresponding companion dollar amount.  $1 (education) up =  $1 (tax cut) up, $1 (education) down = $1 (tax cut) down.

Now, one thing to remember is that the House has not taken a position on the ratio of spending (or appropriate mix) of the “coupled” $600M surplus.  For public education’s $300M any number of possibilities or combinations of spending exist.  For example, the Legislature could fund the WPU (Working Pupil Unit) at a higher rate.  Last year the Legislature Funded the increase in WPU at $133M or a 6% increase over the previous year.  Additionally the Legislature could allocate money for class size reduction or how about teacher retention and incentives.

Now, let’s address the $300M for additional tax reform.  How about another cut in the Personal Income tax  (flatter-tax plan…we’ll call it the J2+ plan)?  The Legislature can take the current flat rate of 5.35% down to 5% (approximately) for another $100M  ($150M for retroactivity).  Or how about even more for personal income tax cuts?  How about eliminating the rest of the state’s portion of the Sales Tax on food?  2.75%, POOF!   Gone!   Worth about another $100M.   (Property tax is primarily a “local” issue and even thought the Legislature has some controls many of the property taxes are controlled by counties, municipalities and other special districts.)

The other figure that you’ll see floating around out there is $805M.  This figure reflects the current projected one-time budget surplus amount.  Philosophically, one-time money is not spent for on-going programs or projects.  However, one-time money can be spent for debt reduction, state transportation projects, and any number of other issues where a single infusion of cash will help solve a problem (remember to factor in state spending limitations laws).  Oh, also, surplus money can be refunded or sent back to the taxpayers from whence it came in the form of a tax cut and/or tax “reform.”

There are some in the House who don’t believe that the Legislature will come out of the General Session Appropriations discussions with an even 50-50 split (Education to Tax Reform)—but, it’s a good starting point.  The message that’s being sent, I believe, is that we can’t let education spending get out of control, become “unsustainable” and at the same time the taxpayer needs some representation and someone to look after their interests.  Utah’s high tax burden is crippling many families on the high, as well as, the low end of the income spectrum.  The message appears to be that to every educational interest’s action their will be an equal and “opposite” taxpayer reaction.

Of course, in the days to come the Senate will come up with its own wacky, convoluted “plan” for the $1.5B surplus.  And, the Governor has already announced his $10.7B budget—where is that shredder, anyway?  Then the games will begin all over again.

To Be Continued…