Utahns feel pinch of inflation as state sits on billions in extra cash
SALT LAKE CITY (KUTV) — Sometimes it's sunny. Sometimes it's cloudy. And sometimes, it just rains.
Rainy is how Mark Smith describes the last year trying to run his business, Tastees Cafe and Mobile Catering, in West Valley City.
“The whole entire last year has been rain ever since the inflation really took over,” Smith told KUTV 2News during an interview inside his restaurant last month.
He feels cost increases painfully. Everything is more expensive.
“It all came on so fast, and everything went up,” Smith said. “It’s unbelievable what an egg costs right now.”
At home in Millcreek, Elizabeth Crofts feels it, too.
With higher gas prices over the last year – which have been surging once again – she’s cut back on driving, opting instead for the train.
“I won’t pay the price if I don’t like it,” she said. “It’s expensive, and I don’t want to spend it, so I just drive less.”
A lot of people can relate to this feeling of just having less money with high inflation. Except, perhaps, the state of Utah.
The state is currently sitting on $1.2 billion in surplus dollars thanks to strong tax revenues – even after setting aside money for tax cuts, infrastructure projects, and inflation.
Additionally, Utah has what’s called a Rainy Day fund, which is currently sitting at $1.3 billion.
KUTV 2News sat down recently with Gov. Spencer Cox for a wide-ranging interview. As part of it, we asked about this surplus of cash.
“What would you say to those out there who are struggling to make ends meet in inflation, and they look at the state and wonder why are you sitting on so much cash?” KUTV 2News reporter Daniel Woodruff asked.
“Well, I would say, you're right,” Cox responded.
The governor said that’s why he has proposed $1 billion in tax cuts, although the details of exactly how to cut taxes are still being worked out with his office and legislative leaders.
But, Cox added, having extra money isn't a bad thing.
“All that means is we have more than we had last year, right?” Cox said. “And we should have more because we have more people that live here.”
On the state’s Rainy Day fund, Senate President Stuart Adams (R-Layton) said it’s been used “very seldom,” and that it’s only for emergencies, like a budget shortfall, with legislative approval.
It’s not for anything else.
“I mean, you have a water heater go out or something else, you ought to have some money in reserve to take care of it,” Adams said. “That’s what we have, and that’s what it’s for, and I’m glad we have it.”
But seeing the state sit on billions is hard for people like Smith, the restaurant owner, whose business is struggling to stay afloat.
“I know exactly what they can do with some of it,” Smith told KUTV 2News. “They can get rid of the food tax.”
He said that would have an immediate impact on his business – and his customers.
“There’s not one single thing that hasn’t gone up in price,” said Smith, “and some of it has gone up ridiculous.”
KUTV 2News took that question about the food tax to House Speaker Brad Wilson (R-Kaysville).
“Is food tax in any way part of it this session, or is it not?” Woodruff asked Wilson at a recent media availability.
“Everything’s still on the table,” Wilson replied.
He and other leaders have repeatedly said removing the tax on food is complicated when it comes to funding since the state constitution mandates where some of that money must go.
But discussions are underway to change that. Late last week, Rep. Mike Schultz (R-Hooper), the House majority leader, confirmed that the plan is to ultimately put the question to voters.
“Our goal is to get it passed this session, that it would go on the 2024 ballot,” Schultz told KUTV 2News. “That’s what we’re talking about, that’s what we’re hoping for, so we’ll see what happens.”
Others have called for more money for housing, or homeless services, or health care. Certainly, there are a lot of needs across the state, and lawmakers – with the power of the purse – are deciding right now which ones will rise to the top.