From Deseret News archives:

Tax deal nearing a resolution

Published: Sunday, Feb. 25, 2007 12:07 a.m. MST
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• There's been a hot debate over abortion, with legislators finally agreeing not to spend the $2 million-plus it would cost if Utah directly challenged Roe v. Wade by outlawing most now-legal abortions.

• Utahns will get a record tax cut, with the state facing record-setting tax surpluses.

• The Real Salt Lake soccer team will get state and Salt Lake County tax help to build a new stadium in Sandy.

But much work remains. For example, the $10.9 billion 2007-08 state budget has not formally been set.

On lawmakers' desks Monday morning will be the main budget bills, which include large increases in spending for public and higher education, Human Services and transportation.

The massive state surplus, which started at $1.6 billion and has grown another $149 million, according to the latest revenue estimates, actually has made the process tougher, the governor said.

"Legislative sessions are not made easier because you have more," he said. "I think they're made largely more complicated because it gives rise to a lot of new ideas and new thinking that people want to try out when otherwise they wouldn't be able to afford some of those ideas."

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Friday, GOP legislative leaders were trying to wrap up how the tax cuts will come, with both the House and Senate GOP caucuses agreeing to dump Utah's 75-year-old progressive income tax system and the new 5.35 percent flat-rate tax system for a single-rate system.

Starting in 2008, Utah will have one personal income tax system again, a 5 percent, single-rate system that uses tax credits as opposed to various exemptions and deductions.

With a lower rate and $110 million in income tax cuts, the new system will give everyone some kind of tax reduction.

Across the state, the average income tax cut is $97. A family making $40,000 will see a $100 tax cut and a family making $70,000 a $200 cut, according to the figures.

Democrats say with all the needs in the state now, including a public education system bursting at the seams, few Utahns really want a $97 income tax cut.

Huntsman says the new 5 percent rate will fuel Utah's already strong economy and entice more CEOs to grow and/or bring their businesses into Utah.

And taxpayers should see taxes reduced this session, given the state of the economy, he said, calling a tax cut "good for all of our citizens, who probably deserve a bit of a break with large surpluses like this." Huntsman said he is confident lawmakers will come through.

"I'm confident. I'm ever the optimist, and I think it is the will of the people. I think the public would like to see that as well," the governor said, adding that taxpayers don't want to wait for a special session to get a tax cut.

And neither does he. "I don't want to see a special session, either," Huntsman said.

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Gov. Jon Huntsman Jr.

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