Utahns may get tax cut

Minority Whip Brad King, D-Price, said maybe the Republican majority can spend it all on roads. "But wait, that would be redundant."

Democrats, teachers and others complained loudly at the end of the 2005 Legislature when Republicans pumped hundreds of millions of dollars in surpluses into road and building construction.

Curtis said the surplus revenues this year will be built into ongoing revenue projections for fiscal 2006-07, whose budget will be set in the 2006 Legislature.

Nearly $80 million in extra revenues come in the individual and corporate income taxes, which by the Utah Constitution must go to education.

"It will allow us to do some significant things for education," Curtis said. "Could it get us to the middle of the rankings in per-student funding? No. That would take $1 billion." But the state could spend more money on class-size reduction, something really needed in growing, urban districts, while providing some other kinds of help to rural districts, he said.

"Look at the 13.4 percent increase in the income tax" collections over projections made just several months ago, the speaker said. "That tells us job growth is strong."

While saying more money should go to education, Becker warned that lawmakers should also put some more cash into the state's Rainy Day funds.

"Those are what saved us" in the tax-starved years of 2001 and 2002, when legislators spent most of the Rainy Day funds and pulled cash out of road and building projects to deal with $600 million in lost revenue.

Senate budget chairman Lyle Hillyard, R-Logan, said that while the $112 million in anticipated surpluses in the new report are good, some of that cash will, by law, be siphoned off before it gets into lawmakers' hands.

A percent of surplus funds must go to the Rainy Day funds. And in some cases, legislators dictate that this much or that much of surplus funds are set aside for certain projects, should there actually be any surplus monies, Hillyard told the Revenue and Taxation Committee on Wednesday.

The talk of tax cuts comes just before an election year. All 75 House members and half of the 29-member Senate will be up for re-election in 2006. Historically, legislators give tax cuts in election years and raise taxes in non-election years.

For example, the gasoline tax was last raised in 1997, a non-election year for the Legislature. And lawmakers actually had record-setting one-time surpluses and ongoing revenue growth projections during the 2005 Legislature — but the only tax cuts discussed were for business.