Fiscal Highlights - November 2016

An Evaluation of Tax Exceptions and Inducements - Andrea Wilko ( PDF)

Utah offers more than 170 exceptions to tax code and inducements to behavior change. They can be roughly divided into four categories: Tax Policy, Economic Efficiency, Public Goods, and Economic Development. Of the 170, about 111 are of unknown dollar value. Many of the 59 whose size can be measured in dollars lack clearly defined purposes and goals.
Yet, states across the nation trend towards greater accountability for tax exceptions. They strive for better information structured in a way that determines potential returns on investment. Doing so allows policymakers to measure effectiveness across multiple and varied incentives.
The Legislative Fiscal Analyst (LFA) developed a report and an accompanying interactive dashboard to create an inventory of Utah tax exceptions and inducements. In the report LFA recommends first steps that could facilitate a uniform analysis of all tax exceptions and inducements. Such an analysis would allow legislators to compare exceptions and inducements and determine which are the most effective. Similarly, it would allow policymakers to decide which exceptions are duplicative and which complement one another.
The recommendations of the report included the following:
  1. Articulate clear purposes and goals for each tax exception/inducement.
  2. Establish common definitions for key measures.
  3. Set baselines and targets for each measure, and then collect observations.
  4. Address data limitations that hamper evaluation.
  5. Create a 3 to 5 year review cycle for those not currently reviewed.
  6. Require a reporting of sales tax exemption or establish a methodology for estimating from economic data.
  7. Modify UCA 59-1-403 to allow the Tax Commission to share small data sets with the Legislative Fiscal Analyst for exception and inducement evaluations.
In response to the report, the Revenue and Taxation Interim committee took initial steps to improve the process by approving a bill draft that would allow the Legislative Fiscal Analyst to work with the Tax Commission to develop methodologies and proposals to estimate the impact of sales tax exemptions. The report was also presented to the Economic Development and Workforce Services Interim Committee.
November 2016 Content ( PDF)

Access to High Quality Schools - Hector R. Zumaeta Santiago
During the 2016 General Session, the Utah State Legislature appropriated $11 Million for 3 years (t...
An Evaluation of Tax Exceptions and Inducements - Andrea Wilko
Utah offers more than 170 exceptions to tax code and inducements to behavior change. They can be r...
An Update on Internal Service Fund Rates - Sean C. Faherty
On November 15th, the Executive Appropriations Committee heard an update on internal service funds....
As the Holidays Begin, Let's Discuss Debt Affordability - Steven M. Allred
I recently had the opportunity to attend a National Conference of State Legislatures fiscal seminar...
B&C Roads Funding May Reach $175 Million in 2017 - Thomas E. Young
The 4th Special Session of the 2016 Legislature addressed B and C Roads funding. Among the formula ...
Comprehensive Study of Career and Technical Education in Utah - Jill L.Curry
House Bill 337, Career and Technical Education Comprehensive Study (2015 General Session), created ...
FY 2018 Capital Development Rankings - Brian Wikle
As defined by UCA 63A-5-104, "capital development" means 1) a remodeling, site, or utility project ...
Justice Reinvestment Initiative (JRI): Status Report - Gary R. Syphus
During the 2015 General Session, the Legislature passed House Bill 348 commonly referred to as th...
Managing the $173 Million DCFS Budget - Clare Tobin Lence
At the October 2016 meeting of the Social Services Appropriations Subcommittee, LFA staff present...
Student Enrollment Continues to Grow - Ben Leishman
A total of 644,476 students enrolled in Utah public schools this fall. This is an increase of 10,58...
Unclaimed Property: A Pleasant Surprise - Alexander R. Wilson
The Utah State Office of the Treasurer has made significant progress over the last three years in r...
Updated Full Medicaid Expansion Cost Estimates - Russell T. Frandsen
Staff was asked to update full Medicaid expansion cost scenarios. This resulted in five changes to ...
USHE Data Available, More to Come - Spencer C. Pratt
The Utah System of Higher Education collects and organizes a significant amount of data from each o...

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