The 2012 Utah Constitutional Amendments

Two constitutional amendments have been submitted to Utah voters for consideration. Below is Libertas Institute’s brief analysis specifying our stance on both with our recommendation for how Utahns should vote.

Constitutional Amendment A: NO

This amendment would funnel money from the severance tax to a permanent state trust fund. The severance tax is imposed upon those who extract oil, gas, or minerals from lands within Utah. A portion of the revenue from this tax would, if the amendment were to be passed, be required to be deposited in the trust fund as opposed to the general fund, where money can more easily be allocated and spent by the legislature.

Proponents argue that these taxes are levied for extracting things from “our land.” This is a dangerous collectivist notion that liberty-minded voters should reject. If I plant a garden in my backyard, then the trees and plants extract nutrients from the soil. The idea of paying a tax to the government because I have used my property in a way I wish is absurd.

The supporters of this amendment also argue that funds should be set aside for future generations, since non-renewable resources belong not only to Utahns currently alive, but to future Utahns as well. “One day, non-renewable resources and associated revenues will shrink and ultimately disappear,” the supporting side writes. “At that point, if we haven’t invested any severance tax revenues for them, future generations will do without.” Assuming these resources would in fact dry up, along with the corresponding severance tax revenue, what is the problem with doing without?

It’s important here to note that many of those who publicly support this amendment are part of the government. To such individuals, a loss of tax revenue implies the inability to adequately fund government programs and services they deem important or politically expedient. All future Utahns would “do without” in this scenario is a nest egg of money to fund big government enterprises. In other words, barring other taxes and sources of government revenue, our posterity would be compelled to reduce the size of government. And that doesn’t sound so bad.

Voting against this amendment would mean that the money would continue to flow into the general fund, where it can be more flexibly allocated by the legislature. This is ideal in this situation, so that the severance tax can be reduced and eliminated, or at a minimum, the money generated can be returned to or spent on those being taxed. Collective property should not exist; all property, except for the government’s own specific needs, should be private. Further entrenching a taxation scheme into the Utah Constitution is problematic and creates additional barriers to reducing and removing the scheme in the future.

Libertas Institute recommends a NO vote on Constitutional Amendment A.

Constitutional Amendment B: NO

This amendment exempts a military employee or his/her spouse from paying property tax if the employee is in “active duty” for at least 200 days during the year. While we support individuals looking for ways to reduce their tax burden however possible when the taxes are illegitimate and immoral, as is the case with the property tax, we cannot endorse carving out exemptions within the system, for it is little more than discriminatory and preferential treatment.

The bill which created this amendment passed overwhelmingly in the legislature, and no argument against it was even submitted for inclusion in the voter guide. After all, who would want to appear unpatriotic by refusing to exempt soldiers from paying a tax?

Speaking for proponents of the amendment, Senator Luz Robles states that it “is about shared sacrifice”—spreading the tax burden amongst the rest of Utahns since, she says, “we must each do our part to support those who are willing to give all for our freedoms and liberties.”

Soldiers voluntarily enter into this career knowing the potential risks, costs, and proposed benefits. They are hired to do a job. If we are exempting one type of worker who is away for 200 days, why not also exempt diplomats, missionaries, salesmen, or other individuals whose careers take them away from their Utah home for prolonged periods?

Whether or not a soldier’s assignment is moral and just, and therefore worthy of support, the fact remains that this amendment would create exemptions for a specific type of employment. Libertas Institute supports a complete elimination of all property taxes, but a piecemeal approach is wrong in that it elevates one class or group over another. While they exist, taxes should be equally imposed upon all. If any group of Utahns is to receive an exemption from property taxes, it should be those on a low, fixed income, such as many senior citizens, whose inability to pay rent to the government jeopardizes their ability to remain in the home they (theoretically) own.

Libertas Institute recommends a NO vote on Constitutional Amendment B.

  • Even without using a libertarian approach, I see several problems with Constitutional Amendment A:
    1- the budget shortfall it creates until 2044 or whenever the interest generated catches up to the annual amount pulled out of use.
    2- the inflexibility of the mandate.  Why do we need RULES for everything?  They tend to discourage the use of reason and common sense.  How about understanding and living by principles? Yes, there are ways to access it in an emergency, but this seems too restrictive for the time we’re in; see #3:
    3- this appears to actually TAKE from future generations:  it takes away our ability to pay down our current debt. According to the Utah Debt Clock, our state has $19.5 billion in debt.  This is where we are truly stealing from future generations.  The greater favor we can do for them is to pay off our debt now, then have our state representatives learn to stay within a budget.   
    If you made $40K each year but spent $46K annually, would you put money aside into a low-yield savings account while you were $39K in debt?  Those are the numbers that Utah Debt Clock translates to. 
    This proposal would most likely be a great thing if we were debt-free. But we’re not.
    The smart thing would be to pay off debt as fast as you could with everything available, then live within (= BELOW) our means.
    That’s how we prepare for the needs of future generations.

  • There is no online argument for Constitutional Amendment B on the online Utah voters’ site.  Yesterday  I called the Lt. Governor’s office to ask why, and was told that no one on the opposing side had submitted one before the deadline two months ago.
    So I called two of the legislators- Daniel McCay and John McDougall-  who voted against it.  (Look it up on )  Both of them were surprised that nothing was online, and said they hadn’t even heard from anyone before the deadline suggesting they submit one.  
    This proposed amendment is not a matter of if I/we appreciate military sacrifices or not, though it’s painted as such.  It is a matter of if an additional expense is justified in an already overspent budget.
    It proposes something that equates to a pay increase.  If it is truly justified, let’s have a straightforward pay raise, then, rather than adding further complication to our tax system.  One of Rep. McCay’s concerns with it is that it opens a new door to ‘undermine’ the property tax: if we exempt military, then how about law enforcement?  Fire?  Teachers?  Public employees?  
    Are our military people going to be in favor of this amendment?  Most likely.  It would be very tempting to me to push for something that exempted me from paying property tax; the only ones who like the tax are the cities and departments being handed the money to spend.   In addition, this proposal will decrease revenue, leading to “the government taxing entity” increasing property taxes on the rest of us.  I’m tired of being slowly bled to death by ‘minor’ fees.  They add up.  Furthermore, I will never truly own my own land, as it can be confiscated if I fail to pay property taxes.  It is not fair to say that some of us are subject to that threat and others are not.
    Sympathy and gratitude do not justify further mandatory redistribution, especially in a manner that is easier to hide.