Big surplus may fuel tax cut

But Monday, Curtis said if the revenues keep coming in like this "and we end up with around $300 million in surplus, (the Valentine plan) is doable."

Huntsman ran last year on a campaign platform that included removing the sales tax from food, although the governor has not put forward an exact plan on how to do that.

"But if the governor, the Senate president and I (as speaker) can't get this" tax off of food, "then I don't know who can. I'm excited about these new numbers and what they may mean" for tax reform and cuts, Curtis said.

Historically, the January-February general session opens the current year's budget and lawmakers spend a bunch of the one-time cash on all kinds of buildings, roads and even ongoing programs.

During the 2004-05 fiscal year that ended June 30, the state actually took in around $400 million more than the budget originally called for. Much of that was spent and a healthy chunk went into two so-called "Rainy Day" savings accounts.

Even with all of that spending, the state ended the fiscal year with $172 million extra in cash. Combined, its Rainy Day funds stand at $146.1 million, state officials say.

All or part of that, too, could be on the table during the 2006 Legislature.

The dynamics of spending will be a bit different this session, however, because the GOP-controlled House and Senate — with most legislators facing re-election in 2006 — are clearly in the mood for tax cuts next year.

Already, the Tax Reform Task Force, which is scheduled to make its final recommendations next Monday, has approved a variety of tax-cutting measures that in total come to tens of millions of dollars.

Removing all of the food tax would cost the state $166 million and cost local governments, transit districts and the ZAP entities (which also impose a small sales tax)a total of another $60 million.

Various state income tax "reforms" could cost another $25 million to $50 million, depending on what final options are picked by Huntsman and the Legislature.

Tax revenues are up across the board. The beer, cigarette and tobacco tax shows a decrease only because a new law requires early year earmarking for some of those funds, Macdonald said.

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