Fact check: Did Utah Governor Gary Herbert raise taxes by over $600 million?

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June 28, 2016
By Humberto Sanchez

Jonathan Johnson (Utah), the former president and CEO of Overstock.com, is challenging incumbent Utah Governor Gary Herbert in the June 28 Republican primary.

One area where Johnson has focused his attacks is Herbert’s record on taxes. In his first ad (and in other forums) Johnson has claimed that Herbert has raised taxes during his tenure as governor more than he’s lowered them for a net increase of “over $600 million.”[1]

We looked at the Johnson campaign’s list of revenue adjustments, which included changes in tax rates, credits, exemptions, and fees between fiscal year 2011 and fiscal year 2017—spanning Herbert’s time as governor—and determined that the claim is true.

According to our review of the data, tax revenue fell 56 times over those seven fiscal years, which totaled $338,337,750. Utah's tax revenue rose 26 times during the same period, which totaled $984,487,817. The net increase is $646,150,067.

Herbert’s campaign said that Johnson’s list does not account for the 34 times he cut taxes as governor. And while this is also true, 17 of the 34 cuts took place between fiscal 2005 and fiscal 2009, when Herbert served as lieutenant governor. (Herbert was first elected governor in a 2010 special election.) The 34 cuts total $473,132,000. The 17 make up $406,257,700.

Background

Herbert began his political career on the Utah County Commission, where he served between 1990 and 2004. Herbert also served as lieutenant governor. He was first elected to the office in 2004 with Governor Jon Huntsman. (Utah is one of 21 states that elect their governor and lieutenant governor on a single ticket.)

Herbert became governor in 2009 when Huntsman resigned as governor to become ambassador to China.[2] He won a special election in 2010 to fill the remainder of the term and was re-elected to his first full four-year term in 2012.[3][4]

Johnson, who is also being supported by the current Overstock CEO, Patrick Byrne, forced a primary with Herbert after winning the state GOP convention in April.[5][6][7]

Herbert's record on taxes

The bulk of the $600 million in increases, $420 million, that Johnson claimed went into effect under Herbert’s watch came from a tobacco tax increase measure, (SB 259 and HB 196), that became law after Herbert decided not to veto in 2010.[8]

The $420 million figure was calculated using state data. The figure was derived by subtracting the difference between the increase in tax rates for cigarettes per pack and for tobacco and multiplying the results by the number of packs sold and taxable sales, respectively, for each fiscal year between 2011 and 2017. Johnson’s campaign is being advised on tax issues by former Utah House member and one-time gubernatorial candidate Kenneth Sumison, who is a Certified Public Accountant.[9]

Another $102 million came from an increase in taxes on gas and other fuels, which was signed into law in March 2015. The legislature’s fiscal analysis, which only looked out two fiscal years, projected the measure would raise $25.1 million in fiscal year 2016 and $76.5 million in fiscal year 2017.[10][11]

And an additional $150 million in increased revenue came from an increase in property taxes. The law raised taxes by $75 million in both fiscal year 2016 and 2017, according to the legislature’s fiscal analysis, which only looked out two fiscal years. The measure went into effect on July 1, 2015.[10][11]

Herbert on his tax record

With regard to the gas tax, Herbert's campaign said in an email that the entire revenue increase cannot be laid on Herbert because it allowed counties to put an increase on the ballot. Only eight of the 17 counties that voted approved the increase. But despite that, the state portion of the gas tax still increased from 24.5 cents per gallon to 29.4 cents and is expected to raise revenue about $76 million a year.[12]

The campaign spokesman also said that because the increase will rise with inflation until it hits 40 cents per gallon, it is difficult to say exactly how much taxes will go up.[13]

Herbert's campaign stressed that he has reduced taxes 34 times. But many of those tax increases came when Herbert was lieutenant governor.

With regard to the 2010 tobacco tax, Herbert said in a statement that he was abiding by the legislature’s desire to raise revenue.

"In December, I proposed a reasonable, rational and responsible budget that was balanced without tax increases. Throughout this legislative session, I have been consistent in my opposition to tax increases at a time when the state continues to move toward economic recovery.

"However, the Utah Legislature opted to approve a tobacco tax increase as a means to balance the state budget. While I remain opposed to any increase in taxes this year, I recognize that the give-and-take of the legislative process requires negotiation, and I have found it necessary to accept the Legislature's proposal in order to protect education funding in Utah.

"At this time, it would be fiscally irresponsible for me to veto these two bills. A veto would create an imbalance in the state budget, and the potential impact on the public and higher education budgets is of particular concern. I have pledged my commitment to protecting education funding to the extent possible during these trying economic times.

"It is for these reasons that I will allow HB196 and SB259 to go into law without my signature."[14][8]

Conclusion

Jonathan Johnson is challenging Utah Governor Gary Herbert in the June 28 GOP primary.

Johnson has been critical of Herbert over the issue of taxes. Johnson, in a TV ad and elsewhere, has claimed that Herbert has raised taxes during his tenure as governor more than he’s lowered them for a net increase of “over $600 million.”

We looked at the Johnson campaign’s list of revenue adjustments, which included changes in tax rates, credits, exemptions and fees, between fiscal year 2011 and fiscal year 2017—spanning Herbert’s time as governor—and determined that the claim is true.

According to our review of the data, tax revenue fell 56 times over those seven fiscal years, which totaled $338,337,750. Utah's tax revenue rose 26 times during the same period, which totaled $984,487,817. The net increase is $646,150,067.

Herbert’s campaign said that Johnson’s list does not account for the 34 times he cut taxes as governor. And while this is also true, 17 of the 34 cuts took place between fiscal 2005 and fiscal 2009, when Herbert served as lieutenant governor. (Herbert was first elected governor in a 2010 special election.) The 34 cuts total $473,132,000. The 17 make up $406,257,700.

See also


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Sources and Notes

  1. ↑ Jonathan Johnson for Governor, "Johnson vs. Herbert on Raising Taxes," April 26, 2016
  2. ↑ Daily Herald, "Huntsman, Herbert lay out their transition plans," May 19, 2009
  3. ↑ Deseret News, "Gov. Gary Herbert defeats Peter Coroon in special election for Utah's governor," November 2, 2010
  4. ↑ CNN, "Herbert wins re-election as Utah governor," November 6, 2012
  5. ↑ Fox 13 Salt Lake City, "Gov. Gary Herbert forced into primary election with Jonathan Johnson," April 23, 2016
  6. ↑ Fox13 Salt Lake City, "Jonathan Johnson cashes another campaign check from Overstock CEO," June 8, 2016
  7. ↑ Salt Lake Tribune, "Jonathan Johnson forces primary for Utah governor race, but can he defeat Gov. Gary Herbert?" April 25, 2016
  8. ↑ 8.0 8.1 The Salt Lake Tribune, "Despite no-tax stance, Herbert OK with $1 per pack hike on cigarettes," March 12, 2010
  9. ↑ Utah Tax Commission, "History of the Utah Tax Structure," accessed June 17, 2016
  10. ↑ 10.0 10.1 Utah Governor Gary Herbert, "Governor takes action on 59 bills including investments in transportation, education equalization," March 27, 2015
  11. ↑ 11.0 11.1 The Salt Lake Tribune, "Guv signs two bills raising Utah taxes by more than $150 million," March 27, 2015
  12. ↑ The Salt Lake Tribune, "Gas tax hike of 4.9 cents per gallon hits Friday," December 28, 2015
  13. ↑ The Salt Lake Tribune, "Utah likely to stick with gas tax as other states test by-the-mile highway funding," April 29, 2016
  14. ↑ Utah Governor Gary Herbert, "Governor Herbert Takes Action on Outstanding Bills," March 31, 2010

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