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Tax cuts could mean Utah has to return $100M in federal aid

March 15, 2021 GMT

SALT LAKE CITY (AP) — Utah’s vote to cut taxes this year could mean it has to return $100 million in aid given under the federal pandemic relief bill.

There’s a provision in the latest federal coronavirus relief package aimed at preventing states from directly or indirectly using federal funds for tax cuts, KUER-FM reported. Since Utah passed $100 million worth of tax cuts it could have to return an equal amount in federal aid.

If the state can pay for the tax cuts from its own tax revenue, though, ith might not apply, according to Jared Walczak with the Tax Foundation think tank. The outcome will depend on guidance from the Treasury Department that hasn’t been issued yet, he said.

The head of the Legislature’s budget committee, Republican Sen. Jerry Stevenson of Layton, said the state has abided by the rules and shouldn’t need to return any money.

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Matthew Weinstein with the advocacy group Voices for Utah Children is calling on Gov. Spencer Cox to veto the tax cut bills so the state can address needs like education, public health, infrastructure and clean air.

Gubernatorial spokeswoman Jennifer Napier-Pearce said Cox’s office is parsing the details as he considers the bills. The deadline is March 25.