The Case For HB133: The 6-Month Car Registration Option

Last year I had a constituent contact me about car registration practices.  His concern was that vehicle registrations were tied to date of expiration, not the date of the new registration.  For example, if he registered his car in July of 2010 it would expire in July 2011.  However, if he waited and registered again in September, his new registration would expire in July 2012 not September.

His recommendation was to allow for real 12 month registrations regardless of the expiration date.  This issue afforded me the opportunity to learn a lot about why the state does things the way it does today.

One of the eye opening things I discovered was that registration fees are not just a "fee" like the one you pay when you go to a State Park or get a marriage license.  The fee we pay when registering a vehicle is actually a fee we pay in lieu of property tax on our vehicles.  This explains why the dates of expiration aren't changed despite lag time in renewal.  The fee is a means to collect property-type tax on vehicles.  Many years ago, the state used to assess property taxes on each vehicle.  However, this process was cumbersome and awkward to collect as most owners in the state delayed payment into the last days of December.  The workload for the State was difficult to manage logistically under this past scenario.

Then, the State adopted the current method of age-based assessments for cars and light trucks.  This current fee structure is called a fee-in-lieu.     

Despite this new information, it still seemed that the State could offer some flexibility to meet the needs of the public when dealing with registration of their cars.  So, I put my head together with the Tax Commission and began to look at some different registration options.

What we came up with was a 6-month registration option for owners in HB133.  The registration fee would be discounted to about 60% of the yearly amount. 

Why would owners want a 6-month registration?  Here are come compelling reasons:

1.  Cars to Be Sold - When a car is sold, the state does not refund the registration fee for the difference between when they sell the car and when their registration expires.  Hence, owners that may know they are going to sell their car may choose a shorter registration.  It makes economic sense to do so.

2.  Seasonal Vehicles - Some folks own multiple vehicles which are seasonal in nature.  Motorcycles, Rugged Utility Vehicles, Sports Cars, and other vehicles may prefer to use a shorter term registration since they receive less use during Winter months.

3.  Social Economic Considerations - Many folks who are in poverty or living month-to-month are often disadvantaged when needing to pay the full year registration.  This 6-month option provides a means for them to pay a less amount.  Although the repeated use of the shorter term registration will cost more to them in the long run, it does allow for short term relief if needed. 

In all, this bill should provide more options to the public while keeping tax revenue nearly neutral at the state and county level.

Moving Forward: Lessons From The First Week of Session 2012

Growing Pains

This week has been quite the learning experience.  Like anyone learning to ride a bike, the first step is to learn to stay up and moving.  Once you get comfortable and aren't tipping over all the time, you can start to do more adventurous things.

This week's adventurous activity was being the only Freshman to have bills to present on the first day of presentations.  These bills were heard during interim session several months ago and were approved UNANIMOUSLY by our committee at that time.  A couple weeks ago I got a call from a colleague who asked if he could take HB30 and run it through the Senate with some minor alterations.  I agreed since I thought it would be a good opportunity to work with a seasoned Senator and learn from his experience. That left me with HB22 and HB23 to present on the House Floor.  These bills were seemingly simple and very straight forward...or so I thought.

The State has a new video archive system.  You can watch my initial presentation HERE.  (Be sure to click on the HB22 link in the scroll box below the player.) Unfortunately, I had some problems.  First, my laptop battery died with my notes on it just as I got up to present.  Second, I had no written notes.  Third, I had not spent enough time reviewing the material and I had difficulty with mental translation.  The summary I received from the Department of Workforce Services (DWS), who requested the legislation, was longer than the bill itself and written in a cryptic dialect of Bureaucratese.  Here is the summary:

If you watch the video you can see the bill fail as the voting board runs red with "No" Votes.    The title of the bill wasn't helpful either.  Many of my colleagues expressed their distaste with the bill title.  It might as well have read: Federal Mandate Database Act.  Clearly, the Federalist spirit is alive and well in our legislative body.   

To make the day even more interesting, I had to present HB23 immediately after that.  You can use the same link to find that presentation. Fortunately, it went moderately better and the bill passed.

When HB22 failed, a colleague told me that he would bring the bill back for reconsideration if I could get some more information on the implications of the bill.  I met with DWS at 9:30am the following morning to inquire as to its benefits and advantages.  To my surprise there were many more than were initially provided.

You can watch video of my second presentation at 10:00 AM HERE. (Be sure to click on HB22 again).  The bill passed.  It is not very often that a failed bill gets a second opportunity at life.  I am grateful the body gave me the opportunity to make the case.  This whole experience was a valuable lesson in both preparation and proper presentation.

Honorable Mentions

After that drama was over, I got word that the Unemployment Insurance bill my colleague in the Senate was running would be mentioned by Governor Herbert in his State of the State address.  Sure enough, my name was mentioned as a sponsor.  You can see that clip below:    


That was a nice gesture and I am sure it will help the prospects for SB 129.  I already have many of my colleagues wanting to co-sponsor the bill.  

Thumb Screws 101

Another interesting experience I had this week was watching some of my colleagues take an interest in an issue I took up in HB58.  When HB58 failed in committee on Monday, I thought the issue was dead and I would move on.  Not so.  One of my colleagues was in negotiations with the parties who opposed my bill while dealing with a bill of his own.  However, unlike my bill, my colleague was working as their advocate in his bill.  Nevertheless, as their advocate, my colleague expressed his extreme displeasure with their treatment of my bill and began negotiating the introduction of its provisions into the bill he was writing.  The dynamics of the negotiation were captivating to watch.  I am unsure if they have concluded so I will have more information on the results of the wrestling match next week.  

Weber County Issues 2012

Our legislative delegation had an opportunity to meet with Weber County this morning to discuss pertinent issues.  There were a few interesting issues that came up:

1.  Weber County vs. Division of Wildlife Resources - The Weber River flooded last year and caused a lot of property damage and loss of crops.  Part of the problem relates to the bird refuge at Ogden Bay which collects water from the Weber River before releasing it into the Great Salt Lake.  Because the bay backs water up the river during heavy runoff, it was necessary to breach the dikes surrounding Ogden Bay to allow water to be released fast enough to avoid further damage.  Weber County has been working with DWR to find a permanent solution but an agreeable solution related to funding has not been achieved.  The County has requested that the State Legislature look at finding a long term solution to the problem since Weber County is the end of the road for Summit and Morgan County water.  It seems that this issue transcends just the jurisdiction of the local County level.

2.  Juvenile Detention Center Closures - Funding has been waning and the State is considering closing the Roy Juvenile detention center.  The Weber Sheriff's Office indicated that this would be a public safety nightmare.  The next nearest detention center is located in Farmington.  Due to the transportation problem, only the most serious juvenile offenders would be transported to Farmington and the rest would be released back into the public.  It is vitally important for the state to fund this center and maintain the Roy facility.

3.  Quarter Cent Funds - There is discussion for allowing Counties of the 2nd class (i.e. Weber County) to use existing quarter-cent tax funds for development of Urban Collector roads to facilitate following the plans as represented in the WFRC 2040 Plan.   

Look for these issues and others to receive attention on the Hill in the coming weeks.

December Caucus 2011

We met as a Republican Caucus today to review some up and coming issues regarding state business.  Here are some highlights:

The Budget

The Governor made his budget proposal recently.  Interestingly, his budget contains about $30 Million more than our consensus budget figures show.  This is an interesting discrepancy.  It appears that the Governor believes that there are accounts somewhere that can be tapped to cover this difference.  If so, the House and Senate are not privy to the whereabouts of these funds and will be allocating funds accordingly.

The State is now at 90% of our constitutional borrowing limit due to a 7% decline in property tax assessments statewide this year.  The state is also running at a $52 Million ongoing budget deficit that needs to be corrected.  Also, student population growth increased 12,000 that needs to be funded.  Even though it is widely reported in the press that we have a $120 Million surplus this year, this "surplus" will likely be consumed entirely in funding student growth, correcting our ongoing budget deficit, and paying down our debt.

Interestingly, a comparison was also given to us today showing how much we have eroded away at our Rainy Day Funds.  In 2007 our Rainy Day Funds and reserves totaled $1.56 Billion.  Today we have just $348 Million.  Rainy Day Fund renewal should be a budget priority as well if possible.

Health Care

We heard a presentation on the Affordable Care Act (i.e. Obamacare).  I didn't like what I heard.  You won't either.  Here is what you have to look forward to:

• Those aged 25-34 will have their premiums increase 40% by January 2014.
• Those who choose not to purchase a policy will be fined 1% of their yearly income.
• If an employee chooses a wrong policy, their employer will be fined.
• Transgender assignment surgery will be covered in all policies.
• As your premiums increase, the Feds will subsidize your premiums (with money they taxed from you.)
• ...and more unsettling regulations.

We also discussed that Utah has 600 individuals on high risk state funded insurance called HIP.  This small group of people have consumed $40 Million in just two years ($33,360 per individual per year).  The Federal government granted Utah the $40 Million to help this group a couple years ago with the idea that the funds would last through 2014.  Today, the money is gone and rather than discontinue the program, the Federal Government has cut Utah a check for another $40 Million in order to prevent embarrassment and discrediting of the program.   

Public Education

The Legislature discussed the concepts of merit pay for school teachers and some of the dynamics at play.  Although no details were discussed, it appears that the body is leaning toward this type of compensation plan for teachers.  Of course, the devil is in the details.  Keep your eyes peeled on this issue in the weeks to come...

Note:  Federal funds equal just $280 Million of our $3.4 Billion public school budget.  Is it worth the strings that are attached?  Let's figure out a way to jettison Federal dollars and exercise freedom to teach under our own recognizance.  

Land Issues

In a big push back at Federal overreach, Ken Ivory is proposing a bill that will force the Federal Government to sell public lands to private owners.  The National Parks would be deeded to the U.S Government but the remaining land would be sold off with 5% of the proceeds going to school funds.  The remainder would be revenue for the U. S. Government (and hopefully would pay down the debt.)

It's a bold idea.  I support it.

Look for more updates to come....

Rollback: Reducing the Burden of Unemployment Insurance

I am sponsoring three unemployment insurance related bills this year.  Two of them are technical in nature and bring Utah's code in line with Federal law regarding reporting procedures and accounting practices.  I won't bore you with the details.

The other bill is more substantive and should be a blessing to taxpayers this year.  First though, let me give you some background on Utah's Unemployment Insurance (UI).

UI is derived from a formula that is written in the state code.  The final number that determines the Overall Contribution rate paid out by any employer is determined by several factors that combine together and produce a figure.  Here are a few components of that:

1.  Employer Contribution Rate - This part of the equation equals all the UI benefits paid out on behalf of the employer over a four year period divided by all the taxable wages of the employer for that same period.  If you are a new business and have no employment history, then the rate you pay will be the average of rates paid by businesses in your industry until you get enough history behind you.

2.  Social Contribution Rate - This rate is derived by calculating all the UI benefits paid out statewide over a four year period and divide it by all the taxable wages in the state over that same period.

3.  Reserve Factor - This is a multiplier that is used like a gas pedal or brake pedal to keep the UI fund solvent.  The fund is designed to hold 18 to 24 months of benefits at any given time.  Ideally, the reserve factor is set at 1.0.  If there is too much money in the account the reserve factor reduces to 0.5.  If there isn't enough in the fund, the rate can change to 1.5 or 2.0 depending on the circumstances.

Here is the formula found in statute to determine what you pay in UI:

Employer Contribution Rate  x  Reserve Factor + Social Contribution Rate  = 

Overall Contribution Rate

The bill that I am sponsoring dose a couple things:

A.  It places a cap on the Employer Contribution Rate so that it cannot exceed 7% for 2012.  Currently that cap is at 9%.  

B.  It caps the Social Contribution Rate at 0.4% for 2012.  Currently, that is scheduled to be 0.5% if this bill does not pass. 

So what is the benefit? Well, Utah's maximum rate is the second highest in the Union.  Maintaining the current course places our business recruiting efforts at a considerable competitive disadvantage.  Encouragingly, it is also estimated that these changes will put an additional $26.4 million in the pocket of Utah taxpayers this year.

UPDATE 12/20/2011 - Here are the links to the bills:

HB22 - Centralized New Hire Registry Act Amendments
HB23 - Special Administrative Expense Account Amendments

HB30 - Unemployment Insurance Amendments
 
If you have any questions or concerns, please contact me.

 

 

Fighting Intergenerational Poverty

One of the issues that was discussed at interim session in September was the issue of intergenerational poverty.  Senator Stuart Reid placed the issue on the agenda of our Economic Development committee to find out what tools were at the State's disposal to help curb this cultural problem.

The hearing was slightly discouraging as we discovered that the state lacked the proper records to make substantive conclusions on the issue.  That means we will need to change the law to better account for who is receiving assistance from the State and when.

The poverty issue is a dead weight around the neck of the taxpayers of Utah.  A large portion of our state taxes are used to service those who find themselves in poverty.  If we can find a way to open doors of opportunity for children out of the poverty lifestyle, the state could return millions of dollars to its taxpayers.

Finding these opportunities will prove challenging.  Education has been mentioned as a key in breaking the poverty cycle.  Interestingly, due to mostly environmental forces, it appears that many in poverty remain in those circumstances due to a lack of education.  Yet, cultural forces within the poor community often place low value on educational opportunities or academic achievement.  It can be a viciously self-impeding feedback loop.

The CATO Institute recently published this brief video on poverty:



Hopefully the Legislature can address this issue this year and find some policy solutions that will benefit both the poor and the taxpayer alike.

Issues of Importance - Response to Reader

I recently received an email from Joyce Wilson:

Jeremy - back to the real issue of worthwhile legislation.  I am sure you probably have researched this, so to save my time, do you have examples of the types of proposals Mr. Hansen has tried to bring to the committees or legislature?  On rare occasion we will read items in the Standard-Examiner of some of his proposals but as I wrote, it is rare.

Scenario - you are now the Leg 9 representative - what are some bills you would craft to bring to committee (or however the process works)?  

Joyce Wilson

Thank for the email Joyce.  Before diving into Mr. Hansen's proposals, let me first highlight several issues that need to be addressed:

1.  Illegal Immigration

I have written extensively on this.  Please click here to see my proposed solutions.

2.  Eliminating the Tax on Food

This is an issue that I have not had the opportunity to write about.  Yet, I feel that it is important, especially for our district, to have the sales tax on food eliminated.  The tax on food is a regressive tax (meaning those who make less pay more as a percentage of their income) and that fact impacts our district more so than most other districts in Utah.  We were working to eliminate the tax on food up until 2008 when the economic crunch forced the legislature to reinstate the full tax.  It is my belief that with the revenue projections stabilizing, we should begin down that road to eliminate the food tax once again.  It is something that should be done gradually, say over a period of 6 years, but nevertheless it is something that should be done.  My thoughts on this subject are heavily influenced by Adam Smith's opinion on the topic:

"The middling and superior ranks of the people, if they understood their own interest ought always to oppose all taxes upon the necessities of life, as well as all direct taxes upon the wages of labor." - The Wealth of Nations

I won't address the tax on wages issue but the logic behind his statement is that the cost of everything we buy is driven by the cost of labor to produce those items.  In turn, the cost of labor is driven by the cost of the necessities of life that are required to sustain those laborers.  Therefore, when taxes on food are eliminated and the cost of food decreases, the working class is able to better support themselves at a lesser cost. A portion of that savings translates into wage savings for producers and therefore cheaper goods for the populace at large.  Everyone gets more for less under his theory.  Intuitively, I agree with this.

The question regarding this issue that I often get asked is: Where will the money come from to pay for this tax break?  Keep in mind that I do not have the benefit of a legislative research staff at my disposal.  But, my hunch based on my own observations is that there is a lot of waste and fraud in our state welfare system.  This would be the first place I would look to balance the equation.  Also, economically speaking, we may be able to grow our way into the tax break over a 6 year period as well.  I am open to ideas that work and make sense. 

3.  Economic Growth

Obviously, the issue that affects us all in Ogden is jobs and the job market.  We need more jobs.  More importantly, Ogden needs an advocate at the state level that can present Ogden in the best possible light and accurately represent all the opportunity that Ogden possesses for businesses who want to grow.  I do not have any legislative ideas to do this.  However, as the sole breadwinner in my home and being self employed for the past 11 years, I understand businesses and what it takes to profitably operate one.  Earning my marketing degree from Weber State University has been a blessing to my business and I know that those same skills can benefit District 9 when I apply those as Ogden's representative.    

Now on to Mr. Hansen's proposals.
Note: According to the state site, none of these bills sponsored by Representative Hansen have become law.


2010 - Click to see list of bills and link to actual text and last action.

HB0156    Regulation of Laser Centers 
HB0245    Voter Challenge Amendments 
HB0297    Compact Agreement among the States to Elect the President by National Popular Vote 
HB0322    Property Tax Valuation Amendments 
HB0358    Voting by Mail   
HB0436    State Officers' Salary Amendments   
HJR008    Joint Rules Resolution on the Selection of Ethics Committee Members

The State Officers Salary bill was interesting because it called for a reduction in executive branch salaries.  Yet, Mr. Hansen voted against several bills calling for Legislative pay reductions.  Quite interesting.

2009 - Click to see list of bills and link to actual text and last action.

HB0049    Voter Challenge Amendments 
HB0049S01    Voter Challenge Amendments 
HB0158    Motorcycle Helmet Law Amendments 
HB0166    Election Law Reforms 
HB0175    Professional Licensing Amendments 
HB0196    Provisional Ballot Amendments for Unregistered Voters
HB0200    Designation of Certain State Buildings 
HB0217    Utah Indoor Clean Air Act Amendments 
HB0227    Prohibition on Citation Quotas   
HB0282    Task Force on Legislative Reform   
HB0311    Utah State Railroad Museum Authority   
HB0311S01    Utah State Railroad Museum Authority 
HB0363    Property Tax - Determining Value for Tax Assessment 
HB0367    Legislative Compensation Amendments 
HB0406    Compact Agreement among the States to Elect the President by National Popular Vote   
HJR026    Joint Rules Resolution on the Selection of Ethics Committee Members

I am grateful the property tax valuation bill did not pass.  It would have allowed for a value assessment every time the property sold.  On the surface, this seems like a fairly benign proposition but unfortunately it is this type of legislation that has opened the door to transfer taxes that have stymied affordable housing in other states.

There is quite a bit to digest here.  Thanks for reading and taking time to learn about the issues.  If you have any questions for me, send me an email or post a comment.

Enjoy your weekend!