SB 135: A Responsible Way to Handle Income Tax Revenue

This bill did not receive a vote. 

In 2017, the federal government implemented sweeping income tax reductions. These income tax reductions left most tax brackets in place but lowered the tax rates for many of them.

Since these changes have been implemented, Utah has been flooded with cash. Utah now has $728 million in ongoing general fund/education surpluses, $1.268 billion in extra one-time money, and the state’s rainy day emergency funds are almost $1 billion strong.

With such a large surplus of revenue, it is important that the state acts responsibly with these funds and can respond appropriately when further federal income tax changes occur. Utah’s government mustn’t use these revenues to perform acts of government overreach that negatively impact the liberties and freedom of the State’s residents.

Senate Bill 135, sponsored by Senator Daniel McCay, refers back to back to these 2017 federal income tax changes and seeks to help address the surplus of funds coming into Utah in a responsible way. Specifically, this bill would place excess income tax funds into a restricted account, rather than just treating it as regular revenue, which is preferable. Money in this account can be put towards the education systems in the state. Additionally, this legislation helps set up a framework Utah can use in the event of other federal income tax changes.

Money in this restricted account must be utilized more responsibly than regular revenue. This is because revenue being placed into a restricted account can only be used for specified purposes that have been determined as appropriate. This bill offers a responsible avenue for the citizens of Utah to know where and why their tax dollars are being spent.