Senate GOP takes stand: Trim taxes by $100M

Senate Republicans finally settled on a proposed tax cut Thursday "in the neighborhood" of $100 million, less than their House counterparts but more than Gov. Jon Huntsman Jr. has proposed.

The carefully worded announcement of the Senate GOP caucus position also stated the cuts would come from both sales and income taxes, and that there was "generally support" for giving poorer Utahns an income tax credit for the sales tax they pay on food purchases.

Exactly where the cuts would be made is yet to be decided, although they would include tax breaks for business such as the $7.2 million sales tax exemption for the telecommunications industry approved by the Senate Thursday.

"We didn't say we want this option or we want this bill," Senate President John Valentine, R-Orem, told reporters after the nearly two-hour meeting behind closed doors. "We're still in negotiations with the House."

Republicans in the House voted in their caucus a month ago to give a $230 million tax cut. They've been waiting ever since then for their Senate counterparts to take a tax-cutting stand.

The governor put $60 million in tax cuts in his $9.6 billion budget — $23 million to slice the top income tax rate from 7 percent to 5 percent and $37 million toward taking the sales tax off food.

And in his State of the State address Tuesday, Huntsman called on lawmakers to take the sales tax off food at the cash register, a request that Valentine said carries a $228 million price tag, including $167 million for the state portion.

Even with $1 billion in extra money to spend this session, Valentine said there isn't enough to take the sales tax off food entirely and fund education programs and transportation projects at the levels the governor seeks in his budget.

"We want to make sure those are adequately funded before we start talking about tax cuts," Valentine said.

But there may be additional surplus money available when the next revenue forecast comes in mid-February. The governor referred to "anticipated new revenue" in his State of the State address as a way to pay for taking the sales tax off food completely.

More money won't change the minds of at least some powerful senators about the best way to deal with the sales tax on food. "This is an issue of policy, not of numbers," said Sen. Curtis Bramble, R-Provo, who has pushed the tax credit.

Huntsman's deputy chief of staff, Mike Mower, said, "The governor remains committed to providing relief for Utah consumers at the checkout counter. A sales tax credit on food is not the best way to provide immediate relief to taxpayers."

Mower downplayed the differences between the Senate and the governor.