Senate to study new tax-cut proposal

Leaders warn plan isn't done deal; panel OKs state pay hike

With the end of the session looming, Senate Republicans are expected to consider a new tax-cut proposal today — a package that would reduce state income taxes by $82 million and business taxes by $18 million.

The $100 million package that features a revision of Gov. Jon Huntsman Jr.'s "flatter, fairer" tax reform plan is by no means a done deal, Senate leaders warned Tuesday after yet another lengthy closed-door majority caucus.

"We have some support for it. We still have some work to get done to get it passed," Senate President John Valentine, R-Orem, said. "But it's moving. We've got people with an interest in it."

The author of the new, more costly version of the governor's plan, Sen. Curt Bramble, R-Provo, was more blunt. "There is no agreement on this," Bramble said. "This is an alternative that will be presented."

Meanwhile, the Executive Appropriations Committee, which is made up of House and Senate leaders from both parties, agreed Tuesday to dedicate $300 million toward unspecified tax cuts and infrastructure improvements. The committee also approved 2.5 percent cost-of-living increases for state employees, a 5 percent increase in the weighted pupil unit for public education, and the fee increases for the Commerce and Revenue Appropriations Subcommittee.

With the session set to end March 1, the Senate is running out of time to come up with an alternative to the $190 million compromise package of tax cuts agreed to by Huntsman as well as the House GOP.

That compromise package includes taking the state's share of sales tax off food as well as the governor's plan to cut income taxes $23 million by reducing the top rate from 7 percent to 5 percent and broaden the tax base by limiting credits and deductions.

The GOP governor has threatened to veto bills and call lawmakers back into special session to get the tax-cut plan he wants. Although Republicans have the majority in both the House and the Senate, it is not clear they could override those vetoes.

The Senate is opposed to removing sales tax off food and says the income tax plan has "too many losers." The losers range from low-to-moderate-income Utahns with large families to some of the state's wealthiest residents.

Bramble said he offered Senate Republicans four alternatives Tuesday to the governor's tax reform plan, which would have cut income taxes by $82 million to as much as $133 million. He said the caucus agreed that if they support tax reform, they liked the $82 million proposal.

At least three GOP senators, though, are steadfastly supporting only a straight tax cut. A decision on Bramble's proposal, which will be combined with five different business tax breaks that add up to $18 million, is expected during today's lunchtime caucus.

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