"We're told everyone's a winner," she said. "The schoolchildren in Utah are really the losers here," she said, calling for the money to be spent improving public education rather than on a tax cut.

The governor's office, she said, has calculated that the state will break even on tax collections sometime between 2012 and 2015, and by 2020, collect an additional $35 million.

"That's quite a gamble to me," Arent said.

Even Sen. Lyle Hillyard, R-Logan, said the constituents he's talked to say they'd rather give their tax cut to public and higher education. Hillyard said at a recent national conference of legislators no one argued that a lower income tax rate results in any kind of economic development — rather, a smart work force is what business leaders want.

"Why do we have to do it now?" Hillyard asked, noting that taxpayers won't see the extra money until they file their taxes next spring.

Senate Minority Leader Mike Dmitrich, D-Price, the only member of his party who supported the bill in the Senate, carried an amendment to index the new tax brackets to inflation, which will cost between $4 million and $6 million a year starting in 2009 but will stop what amounts to an automatic tax hike each year as salary increases push taxpayers into higher and higher tax brackets.

House Republicans changed the tax bill slightly, lowering the current top rate from 7 percent to 6.98 percent starting this year. The House then adjourned, forcing the Senate to either take action or leave without approving a tax cut.

"This gives a bit more money to the middle class," said Rep. Jim Dunnigan, R-Taylorsville. By lowering the top rate, the more money someone made, the larger the tax cut.

But there was some disagreement over what the amendment really means, with some senators pointing out middle-class taxpayers would actually get a bit less of a tax cut through the change.

As pockets of legislators huddled to debate who might get a bit more, who a tad less, it is clear that Utah's economy is driving record tax revenues. Some $380 million came in surplus the fiscal year that just ended June 30.

And Rep. Wayne Harper, R-West Jordan, said only two months into the new fiscal year, the reports already show tax revenues are coming in 20 percent higher than budgeted.

With such huge surpluses, conservative Republicans said it is time to give tax cuts, while Democrats and a few moderate Republicans argued for more public education funding.

Rep. Steve Mascaro, R-West Jordan, said his two grandsons are in kindergarten classes of 34 and 35 children, with portable classrooms taking up playground space.

He said he won't vote for tax cuts until "you take the portables off the playgrounds that my grandkids can't play on."