From Deseret News archives:

$10.7 billion record Utah budget

Huntsman's plan for next year calls for $100 million tax cut

Published: Wednesday, Dec. 13, 2006 2:31 p.m. MST
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Cashing in on the hottest economy in a quarter century, Gov. Jon Huntsman Jr. on Tuesday unveiled a $10.7 billion budget for next year that includes $100 million in tax cuts, plus record spending for education and other state needs.

"Utah's school kids are on Santa's good list," Huntsman said.

So are Utah taxpayers.

But before the ink was dry on Huntsman's $100 million tax cut proposal, House Republicans in a daylong closed caucus upped the ante.

"We believe there should be a $300 million tax cut," said House Speaker Greg Curtis, R-Sandy. Curtis said he has 38 votes — a House majority — for giving three times the tax relief that Huntsman suggests.

The governor said his $100 million tax package would reduce the new flat tax rate set to take effect Jan. 1 to just 5 percent and lure 60 percent of taxpayers into the new flat-rate income tax system, giving a family of four earning $50,000 a year an extra $50 tax break.

Lawmakers will have more money to spend than ever before when the 2007 Legislature convenes in mid-January. The governor announced Tuesday there's almost $1.6 billion just in one-time surplus and ongoing revenue growth.

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"It's the largest single year of revenue increases that I've ever seen in the 19 sessions I've been involved with the Legislature," Senate President John Valentine, R-Orem, said. Past years were "not even close."

While Valentine said Senate Republicans are likely to support the governor's overall recommendations — including the $100 million tax cut — the stage is set for a battle royal over who gets to pass out more cash to Utah taxpayers.

"Actually," said Curtis, "many in our caucus believe our next budget (fiscal 2008) should grow only at historical patterns — 7 percent to 8 percent." If growth were limited to that, considering the huge tax surpluses coming into state government, "we would give a tax cut of $470 million," said Curtis. "The $300 million level is a lot. But we have an extra $1.6 billion in one-time and ongoing revenue to appropriate. And that's a lot of money, too."

Minority Democrats had plenty to be happy about in the governor's proposed budget. One of the most senior members of the Legislature, Senate Minority Leader Mike Dmitrich, D-Price, said he was surprised at the focus on funding programs usually backed by Democrats.

"In all my years in the Legislature, it's one of the most exciting budgets," Dmitrich said. "He not only covered education, he covered human services, transportation and even some of the building needs."

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Gov. Jon Huntsman Jr. discusses his budget Tuesday at a press conference in the Capitol.

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