Senate to study new tax-cut proposal

At least three GOP senators, though, are steadfastly supporting only a straight tax cut. A decision on Bramble's proposal, which will be combined with five different business tax breaks that add up to $18 million, is expected during today's lunchtime caucus.

This is just the latest in a series of attempts to break the tax-cut stalemate between the Senate and the House and governor. Last week, the House and the governor agreed to leave the sales tax on food at the local level, but that had no effect on the Senate's opposition.

"We've been as clear as we know how for some time now," Bramble said of that position.

Although Senate Republicans had talked for some time of giving at least poorer Utahns an income tax credit for the estimated $75 each person spends annually on sales taxes on food, Bramble's new proposal does not provide for that.

Instead, it increases the amount of personal deductions beyond what the governor's tax reform plan calls for and gives an additional $100 per person deduction. Bramble said that may be seen as compensation for the sales taxes paid on food, or something else.

For example, a married taxpayer filing jointly gets a $900 deduction under the new proposal compared to $600 under the governor's plan — plus that $100. For a single taxpayer, the proposal offers a $400 deduction plus the $100, compared to $300 under the governor's plan.

Bramble said the $75 income tax credit for taking the sales tax off food "would break the bank" and that he had to make a trade-off between offering that and eliminating more of the "losers" who would pay more tax under the governor's plan.

House Majority Leader Jeff Alexander, R-Provo, said leaders are still struggling between the House and Senate Republican caucuses, trying to find some areas of agreement.

Alexander said he doesn't know if Huntsman's H3 "flatter" income tax reform bill has enough votes to pass in the House.

Monday, House Minority Leader Ralph Becker, D-Salt Lake, said while House Democrats may be willing to cast some tax-cutting/reform votes for GOP bills, Democrats don't want to cut any taxes that feed the Uniform School Fund.

Both personal and business income taxes by the Utah Constitution must go to either public or higher education.

Becker suggests that Huntsman's H3 bill could be changed to make it revenue neutral — not costing the school fund any money.

Education funding did get a $114 million boost from Executive Appropriations' approval of the WPU and retirement money, which was in the State Board of Education's request. It was not, however, enough to satisfy the state's largest teachers union. Instead of 5 percent increase to the per pupil funding, the Utah Education Association would like to see an 8 percent increase in a year where the state has more than a billion dollar surplus.