While many businesses closed their doors, downsized, or otherwise dealt with the negative financial impact of the coronavirus pandemic during 2021, the amount of tax revenue state and local governments received was actually at a record-breaking high.
Notably, revenue has increased from a wide variety of sources, including increases in income, sales, and other taxes. Sales tax increases are particularly relevant to lawmakers in counties, cities, and towns as sales tax revenues are one of their primary sources of revenue.
This unexpected increase in revenue has left governments throughout Utah not only with the question about how to spend the surplus but also with the decision about how it should affect budgets.
During this discussion, Senator Lincoln Fillmore sponsored Senate Concurrent Resolution 7, which contains a much-needed message of caution — don’t assume spikes in revenues continue indefinitely. In addition to calling on local governments to consider any above-trend tax revenue as one-time revenue when setting budgets, the resolution also urges the need to consider federal relief funds as temporary.
Luckily, others in the state Legislature agreed with the message — the resolution passed without a single no vote. The governor also promptly signed the resolution when it passed relatively early in the legislative session.
We at Libertas are pleased to see the much-needed message of fiscal responsibility contained in Senator Fillmore’s resolution unanimously approved — especially as we continue to see record growth and the possibility for more financial volatility in the future.
