Utah Gov. Spencer Cox announced that a “cornerstone” of his $30.6 billion budget for the upcoming legislative session will be to completely eliminate the state tax on Social Security benefits.
The recently reelected Republican governor campaigned heavily on signing a record $1.2 billion of tax cuts into law during his first term. On Thursday, Cox revealed that one of his priorities for fiscal year 2026 will be to deliver additional targeted tax relief to senior citizens.
“This will help the most vulnerable in our state, our seniors, especially those living on a fixed income,” Cox said during a press conference at the Salt Lake Veterans Home. “We can do this this year, and I think we have a moral obligation to do this this year.”
Cox’s first budget proposal for his second term, entitled “Where we’ve been and where we’re going,” lists plaudits Utah received in 2024 — as best state in the nation, best state to start business, most affordable state and best economic outlook. But there is one place where Utah comes close to last.
Utah is one of only nine — soon to be eight — states that continue to tax the Social Security income of retired seniors. While the Legislature worked with Cox to enact a Social Security tax credit in 2021, which it expanded in 2022 and 2023, it has not gone far enough, according to Cox.
“I think it’s an embarrassment that we are one of eight states that still does that,” Cox said.
Cox expressed openness to further reducing the state income tax. State lawmakers prioritized cutting the income tax rate from 4.95% to 4.55% between 2022 and 2024. But he said targeted tax relief will do much more to help seniors on a fixed income, then will a blanket income tax cut of just a few percentage points.
“Now, we could do another five-basis-point increment and save you and me $15 a year, or we could save my grandma $1,000. I think it’s an easy call,” Cox said. “I think giving everybody a tiny cut versus giving our seniors a very big cut, I think it’s a no brainer.”
Cox’s proposed tax cut for Social Security recipients would directly affect an estimated 150,000 Utahns who file taxes for Social Security income, not including others in their household, saving them an average of $950 per year. It would not impact tens of thousands of Utahns who already qualify for Social Security tax credits because of their income level.
Abolishing the tax on Social Security benefits will cost the state an estimated $143.8 million every year. Cox says this cost can be covered by the $165 million set aside for the elimination of the sales tax on food, which ultimately failed when a ballot initiative to amend the state constitution was voided earlier this year.
Cox delivered his remarks at the William E. Christoffersen Salt Lake Veterans Home, one of four veteran care centers in Utah. Dan Butz, a resident of the veterans home who served in the Navy during the Vietnam War, said he is not reliant on his Social Security check, but he knows many of his fellow residents who are.
“When I was younger, I put money in the right places. But for the bulk of the people, they didn’t, and consequently they’re hurting, and a lot of the guys that are here are hurting,” Butz said.
Cox centered his remarks at the veterans home around his budget’s WISE initiative. The acronym stands for wealth, independence, security and engagement, and represents how Cox wants his budget to support the older generation in the state, which is expected to double by 2060, according to the Kem C. Gardner Policy Institute.
Beginning with eliminating the Social Security income tax, the initiative also seeks to invest $20.5 million, including $13.2 million in federal funds, to promote home based health care; $1.4 million for organizations that aim to safeguard seniors from fraud; and $4.5 million for Utah’s Meals on Wheels program which brings food to older adults who struggle to cook for themselves.
Speaking from the veterans home, Cox also proposed allocating an additional $250,000 to fund the position of veterans suicide prevention coordinator, the same amount to fund operations at the state’s veteran cemetery, and $5 million to boost National Guard recruitment, retention bonuses and tuition assistance.
Cox framed his proposed $30.6 billion operating budget as a return to normalcy after multiple years noted for influxes of federal pandemic aid.
Fiscal responsibility remains a priority, Cox said. The governor’s office received more than $1 billion in requests for budget increases, Cox’s budget director, Sophia DiCaro, said. Less than a quarter of these requests made the cut.
Cox highlighted how as the state’s population has grown by 45% since 2004, the number of state employees has only increased by 7%. But during that same time, the governor’s budget recommendations, as well as the actual budgets approved by the Legislature, have grown from around $8 billion to $30 billion — an increase of 275%.
Unlike past years, the governor’s current budget proposal does not include large subsidies for affordable housing construction, or historic investments in water conservation. Cox said that decreasing the cost of housing and increasing the production of energy in Utah are his top priorities but that solutions to these problems are largely based on regulatory reform.
