Gov. Jon Huntsman Jr. said he still won't support tax cuts, even though new revenue projections show the state has accumulated a surplus of nearly $41 million in just the first two months of the budget year.

Huntsman said during Thursday's taping of his monthly news conference broadcast on KUED Channel 7 that cuts won't be a part of the tax reform package his team of experts is putting together.

"I'm not rethinking that," the governor said. "This is a preliminary indication of where we might be going, but it is by no means an accurate portrayal of where the numbers are or . . . where we're likely to be at the end of the year."

Later, Huntsman asked to clarify his comments. He told the Deseret Morning News that he wants to be "on record as saying I will remain open-minded to proposals" from the state's Tax Reform Task Force.

Those proposals may well include tax cuts. The task force's co-chairman, Sen. Curt Bramble, R-Provo, said even if they don't cut taxes, by next year lawmakers will face "a lot of pressure to consider a tax cut. It's a little bit premature to identify what kind of a tax cut, or how much."

Both the governor and task force members have called for a tax credit to offset the sales tax on food paid by low-income Utahns. That alone would amount to $30 million to $50 million, Huntsman said.

When it comes to general tax cuts, however, he sounded less optimistic. "I don't know, however, that at the end of the day we will get there. Next year, perhaps," the governor said. "We'll just have to look at the numbers."

The latest revenue report from the Utah State Tax Commission that shows collections are expected to come in $40.9 million above budget — and that's just for July and August. The new budget year began July 1.

Those numbers are an indication of a "very robust" economy, Tax Commission chief economist Doug Macdonald said. "The sales tax is up 11 percent, and the income tax is up 8 percent."

While Huntsman doesn't expect to propose a tax cut until the 2007 Legislature, lawmakers will likely want to take action in the coming session that begins in January. All of the House and half of the Senate is up for re-election in 2006.

Lawmakers had more than $600 million extra dollars to spend last session. And some, including Senate President John Valentine, R-Orem, have said its time to look at giving some of the surplus back to taxpayers.

Huntsman, though, has said no to tax cuts since May. Thursday, he said he hasn't changed his mind, citing concerns over high energy prices and other inflationary tendencies in the economy.

"You've got to remember we've got energy prices that are going to be extraordinarily high," the governor said. "We're growing very quickly, and that means prices will likely escalate to some extent."

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