Spending showdown: Less money than hoped could alter tax-cut plans
Even with more than $130 million in additional ongoing and one-time money now anticipated, the governor's $9.6 billion budget will have to be cut to cover the cost of taking the sales tax off food at the cash register and establishing a "flatter" income tax rate.
"We're still very focused on providing real tax relief," said Huntsman's deputy chief of staff and spokesman Mike Mower, who called $50 million "a figure that is in the ballpark of what would need to be reviewed in the governor's budget."
Just where the governor will propose cutting his budget remains to be seen. Huntsman had called for substantial increases in spending on education, roads, state workers and virtually every other major area of the budget.
The much-anticipated final revenue estimates for the new state budget year that begins July 1 project an additional $63 million in ongoing funds will be available plus another $68.9 million left over from the current budget year.
That's on top of the $1 billion in new money the 2006 Legislature already has to spend. All that cash had already helped lead to a split between the House and Senate over the governor's tax-cutting proposals.
Now, with the new numbers and just over two weeks left in the session, the stage is set for a showdown on spending.
Huntsman is scheduled to address the Senate's GOP majority caucus today to pitch his tax proposals. It'll be a tough sell, since Republican senators have said they want only $100 million in cuts and prefer an income tax credit for sales tax paid on food.
Some senators have even balked at his "fairer, flatter, simpler" income tax plan that would reduce the 7 percent top rate now paid by most Utahns to 5 percent and eliminate some deductions.
The governor, who put just $60 million for tax cuts in his budget and then told Utahns in his State of the State address last month that it was time to take the sales tax off food, had counted on the new revenue estimates to make up the difference.
But the estimates weren't that high. Had the amount of ongoing revenue been boosted by at least $80 million not the $63.2 million announced "that would have made the decision pretty clear," said Senate President John Valentine, R-Orem.
Valentine stopped short of saying the Senate would not reconsider its position on taking the sales tax off food at the cash register.
"We're not there. We still have a lot of negotiations," he said. "This is not as much as it's going to take to do it all."
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