From Deseret News archives:

Senate Republicans combine tax-cut proposals

Single bill will contain both food credit, flat-tax plan

By Lisa Riley Roche and Bob Bernick Jr.
Deseret Morning News

Published: Wednesday, Jan. 25, 2006 9:12 a.m. MST

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The situation could change in a month, when legislators will get updated revenue estimates for the next budget year that begins July 1. Already, some Republicans are predicting those new numbers could be $50 million to $100 million higher than previously anticipated.

Huntsman, whose proposed budget is based on estimates from December, suggested in his second State of the State address last week that there could be enough new growth to fully fund taking the sales tax off food.

The governor put a $60 million tax cut in his $9.6 billion budget to cover both the flat tax and some effort toward removing the sales tax off food — which would cost the state about $166 million at the state level, and local governments, another $60 million.

House Republicans voted in caucus before the session started to support a $230 million tax cut. Last week, Senate Republicans finally decided they want a $100 million tax cut.

Dougall said he's gotten a fiscal note from legislative budgeters on the flat-rate portion of his bill. "It will cost (the state) about $17 million, which is about where we want to be" on any kind of income tax reform measure this session, he said.

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There's a bit of irony in how Senate Republicans are approaching the issue of flat-rate income tax and food sales tax, Dougall said. Senators on the Revenue and Taxation Interim Committee told him not to include food-tax removal in his flat-rate income tax bill.

"Now I hear they (GOP senators) are doing the same thing — pairing up a flat-rate tax with the income tax rebate," Dougall said. "Now all of a sudden it's a good idea."

The Senate maneuver comes the day after legislative leaders and the governor announced they'd been warned taking the sale tax off food could jeopardize some $1 billion in bonds issued by local governments.

Although the Senate GOP has said that reinforced their position, House Republicans and the governor said any such problems created by removing the sales tax off food could be resolved.

E-mail: lisa@desnews.com; bbjr@desnews.com