Katie Alaimo, Kalamazoo Gazette
FILE – In this Sept. 18, 2014 file photo, produce is displayed for sale at a farmers market in Kalamazoo, Mich. (Katie Alaimo/Kalamazoo Gazette via AP)
Utah currently has a reduced sales tax for food purchased at grocery stores, but discussions at the state legislature about tax reform have thrown this topic on the chopping block. Earlier this year, the Tax Equalization and Reduction Act was introduced in order to help address gaps in the state’s budget. With a growing state population, a changing economy and a tax structure that is 80 years old, lawmakers are trying to grapple with how to pay for public goods and services. Therefore, they created a task force to examine various strategies to increase state revenue.
One strategy that the task force is considering is to increase sales taxes on food — discarding the reduced rate that Utah residents now pay. As researchers who focus on policies that impact low-income families, we argue that increasing food costs is a risky approach to balancing budgets. Already, 372,850 people living in Utah are food insecure — meaning they lack consistent access to enough food to live active, healthy lifestyles. A 2019 study found that the average meal cost in Utah was $2.81. However, for struggling Utahns, there’s a huge budgetary shortfall in what they should eat and what they can afford to eat. In order to consume a diet that is recommended by the U.S. federal government, Utahns would need to spend more than $3.00 per meal per day. That leads to individual annual food budget shortfall of $3,345 per year — the additional amount of money per year that they would need to spend to meet their basic food needs. A food tax is likely to increase this number substantially.
Food is not an optional purchase for any family, meaning that every family, no matter how impoverished, will face increased expenses. Food insecurity is a risk factor for children not doing well in school, as well as mental and physical health problems. Children who are food insecure are more likely to miss school due to illness, have lower academic achievement and experience slower skill development. As these children grow into adults, lower educational attainment leads to lower-paying jobs, and lower-paying jobs make it more difficult to maintain healthy lifestyles. Unhealthy lifestyles in turn contribute to chronic diseases like diabetes, heart disease, stroke and a decreased life expectancy. Taxing items essential to the health and well-being of Utahns could bring unforeseen long-term costs to the state.
Seventy percent of the state is rural, and those areas will be hit the hardest by this proposed policy. Rural food-insecure families often face additional economic and physical barriers to purchasing food than urban families: They pay higher food prices, they have to travel farther distances to get to the closest supermarket and they are less likely to have access to a personal vehicle. When it comes to implementing a full sales tax on food, rural residents are going to have to face two simultaneous financial hurdles: 1) paying the full sales tax after 80 years of paying a reduced one, and 2) paying for a full sales tax on food that is already more expensive for rural residents than urban residents.
On Aug. 20, Utah’s state legislature will meet again and possibly revisit the idea of restoring the full sales tax on food. When they come together, lawmakers should carefully consider how their tax policy might impact the amount of food rural and low-income residents can put on their tables.
Lindsey Haynes-Maslow is an assistant professor & extension specialist at North Carolina State University. Sandra H. Sulzer is an assistant professor of health and wellness at Utah State University.