PEP Squad Episode 5 – Special Session & Tax Reform

The PEP Squad discusses the recent Tax Reform bill and what it could mean for employee compensation.

Transcription:

P.E.P Squad Transcript: Episode 5

By: Todd Losser, Kendle Zdunich, Hannah Gorski & Sam Unruh

Produced by Christy Berk

Kendle:

Hi everyone, welcome back. I am Kendle. (everyone introduce themselves by name)

Today we’re going to be talking about tax reform, it’s a real hot button topic right now. A little background, last session was when this was really brought up by a lack of funding to the general fund. They said that the only way to address this was to change the way the tax is structured right now. So, legislators brought up tax reform at the end of the session and they tried to make some really big changes quickly and it didn’t go through because they couldn’t agree on anything. Because of this, a lot of bills to died last year because they had no funding and they said they weren’t going to pass any bills with new money because they wouldn’t be able to fund it later on. So now fast forward to the current state, & this why all this tax reform has been happening right now.

Todd:

Basically, state employees are paid by collecting sales tax. For quite a while now & the economy has been good. With the economy the way it is there’s like a 2.7% unemployment rate now.  So, state employees and government employees should be paid appropriately. Especially with the economy and the way it’s doing more. This is an issue we ran into last July, as Kendle said, we were told that there was not any money & that was extremely frustrating for UPEA. Every time I went in to talk about a COLA or hot spot funding, they told me that there’s no money.

The legislature created a task force to study the issue & they’ve been meeting all year long. They just had their last meeting on Monday, and they came up with the bill and went into special session.

Sam:

Last night was the Special Session (12/12/19) & they passed the bill and so here is some information from the bill that was passed:

  • The income tax cut, overall, is going to be 630 million
  • There are some tax cuts & new tax credits to help offset the sales tax increase which is going to increase by 475 million
  • Mostly that money will come from grocery sales tax increase to 4.85% from 1.75%
  • Additionally, there are a few tax credits for families to offset that because obviously those people are buying the most groceries.

Last is a few taxes on some service-based businesses, such as bus services, ride-sharing apps, streaming services, and shipping & handling.

Hannah:

So, this bill did pass last night with a majority vote, but they failed to get ⅔ of the vote meaning that there is a chance that public groups/citizens can petition the bill with a referendum. It will depend on how people react & their response to the grocery sales tax & a few other services increasing in cost.

Todd:

Today, (12/13/19) we have Executive Appropriations meeting and we’re going to see if they’re going to talk about how these changes in the tax bill that they passed last night. One thing that’s been kind of interesting through it all is that over the last weekend newspapers started reporting that the tax cut was so large due to the efficiencies of the Utah State Government. That means that if state government is becoming more efficient, that is due to the employees, the public employees. If so, the state employees should be rewarded & some of that money should go towards funding their compensation increase at 5% COLA. Obviously, employees are doing the work so you ought to be rewarded for that. That is UPEA’s position.

Hannah:

Just emphasize again, we really appreciate everything you guys do for the State of Utah.  Sam & I wanted to touch on the fact that if there is excess money in state government, public employees should be seeing it reflected in their paychecks.

Sam:

The major takeaway is that we need your help to drive home this message to your representatives. This is a great thing to mention when you call your legislator, talk about the tax bill & what it means for you & your family. Also, mention that UPEA is lobbying for a 5% COLA increase & you deserve to have some of the money you’re helping to generate for the state. So please call your legislators!

Kendle:

To end, we want to reward anyone who is listening to these podcasts. If you are at the end & you’d like to win some UPEA swag, email Kendle (Kendle@upea.net) the word: MISTLETOE to win some UPEA swag. We will send it your way.

Thanks for listening to PEP Squad! Happy Holidays!