SALT LAKE CITY – Despite the cloud overhang on the horizon, Utah’s financial picture is looking good.

It announced a $1.3 billion surplus (up from $3.3 billion) including a fund earmarked for the Utah Legislature’s powerful executive committee. With that large amount of revenue and funding, lawmakers are looking at tax cuts.

On Wednesday, the interim legislative committee passed a bill to cut the tax rate from 4.85% to 4.8%. A small half dozen percent is not expected to stick. Legislators are expected to go lower. The Utah Taxpayers Association, a tax watchdog group, has urged lawmakers to make deeper cuts.

But some advocacy groups on Utah’s Capitol Hill argue that there should be no tax cuts – instead, the money should go to other needs in the state.

“There’s over $5 billion in unmet need, a lot of it in education,” Matthew Weinstein of the group Voices for Utah Children told the committee, saying that teachers, bus drivers and prison staff are underpaid.

“Cutting the tax rate is not a good return on investment for the middle class family. If you cut the rate, they get $50, but twice as much as the investment in the education of children.”

The bill languished in committee, with only two House Democrats voting against it.

On Wednesday, the committee presented the constitutional amendment bill. Currently, up to 45% of a person’s wealth is exempt from taxes. The proposed amendment would make it at least 45%. It also completely bans real estate sales taxes. Utah does not currently tax real estate transactions, and there is no attempt to force them to.

Outside of Utah, some states have used these taxes to access affordable housing.

Sen. Dan McCay, R-Riverton, chairman of the Senate Revenue and Taxation Committee, said he did not believe their ban would hurt the ability to afford housing in the future. He said the ban would lead to greater transparency in property tax laws.

The bill was passed in a joint committee. If it is passed by the full House of Representatives, the opinion of the voters will be seen. Recently, Utah voters rejected a special session constitutional amendment by a margin of 64% to 36%. Senator McCay said some of the blame for the amendment’s failure lay with the legislature, due to a lack of voter education on why it was needed.

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