A tax compromise possible

If politics is the art of compromise, and if just a few Republican lawmakers will give a little and accept $190 million in income and sales tax cuts, the heavy lifting on tax cuts in the 2006 Legislature will be done.

"There is a compromise that's been discussed between me, Senate President (John) Valentine and Gov. (Jon) Huntsman (Jr.)," House Speaker Greg Curtis confirmed Wednesday afternoon.

"Everyone's moving," Valentine, a Republican from Orem, said of the proposal. "Everyone's moving around to different positions."

The governor's deputy chief of staff and spokesman, Mike Mower, said he's optimistic.

"We feel there's a real desire to reach consensus, and we're working very well with House and Senate leadership," Mower said.

House and Senate leaders are expected to discuss the compromise today and take it to their respective caucuses.

And if — it may be a pretty big "if" — there are enough votes in both bodies, the overriding tax questions in the 2006 general session will basically be agreed upon. GOP legislative leaders explain the compromise this way:

• Instead of the current flatter-rate income tax rate bill being set at 4.9 percent, it will rise slightly to 5 percent. That will trim the estimated loss in revenue to the Uniform School Fund from $60 million to around $23 million.

• Instead of removing both the state sales tax and local option and "boutique" sales taxes from unprepared food, only the state portion of 4.75 percent will be removed from food. That will still cost the state around $166 million.

But 227 cities and towns will keep their 1 percent sales tax rate on food, the 29 counties will keep their 0.25 percent, and the transit authorities, resort towns, rural hospitals and Zoos, Arts and Parks (ZAP) special sales taxing entities will keep their local rates on unprepared food as well.

Local governments, the Utah Transit Authority, Utah Symphony, Hogle Zoo, and others will "remain whole," said Curtis, R-Sandy.

"That removes opposition to removing the sales tax from food from some very large and influential groups," says Curtis. While Curtis and others believe HB109, which removes all of the food sales tax, is workable for all, "we have a lot of local officials out there who are just scared to death" of losing their food tax revenues.

"I, of course, prefer that we remove all of the sales tax from food," said the speaker, who first introduced a plan last fall to do that. "But across the nation, seven or eight states have such a bifurcated food tax plan — it does work."