Gov. Jon Huntsman Jr. has taken income tax reform off the table, but legislative leaders said Tuesday he still needs to call a special session of the Legislature this spring.

"There are a few loose ends we need to look at," Senate Majority Leader Peter Knudson, R-Brigham City, said after a joint leadership meeting. "I think most of us in leadership see that there is a justification for a special session, even without taxes."

The most important item for lawmakers to deal with is the reallocation of $235 million in transportation funding vetoed by Huntsman because it was appropriated from the wrong fund when the budget was approved during the general session.

Without action before the new budget year begins July 1, planned road projects could potentially be stalled and bond payments, especially for the Centennial Highway Fund, could be placed in jeopardy.

Other items that could be considered are bills that did not pass during the general session because of time constraints but are generally supported, such as pay raises for state officials and a resolution opposing high-level nuclear waste in the west desert.

The governor, who has sole authority not only to call a special session but also to set the agenda, hasn't committed yet to bringing lawmakers back now that he's put his tax reform plans on hold.

Huntsman has said, however, that there are issues such as restoring dental benefits for the poor as well as the budget corrections that he'd like to see taken up by lawmakers before the start of the new budget year.

Lawmakers may be ready to give the governor a push to call a special session after Wednesday's caucus meetings. It'll be the first time the majority GOP will gather since Huntsman's surprise announcement he was canceling a special session planned for May.

House Speaker Greg Curtis, R-Sandy, said he expects caucus members to come up with proposed agenda items for a special session — but not to offer any new proposals for tax reform.

"Half of the caucus felt that early on, they would prefer to just lower the rate, and that's still out there," Curtis said. "But there is not anything new." Knudson, too, said there likely wouldn't be any alternatives presented by Senate Republicans.

Huntsman had intended to force lawmakers in May to focus solely on his $70 million income tax reform plan that would lower the current top rate for most Utahns from 7 percent to about 5 percent and eliminate most deductions.

Any other issues — especially those being pushed by lawmakers — would have had to wait until a second special session in June. That way, Huntsman would have rewarded those legislators who supported his plan.

But that strategy won't work now that it's been discovered the price tag for the income tax reform plan is actually 50 percent higher than budgeted, thanks to an error in data supplied by the Utah State Tax Commission.

Huntsman has said he isn't giving up on reforming the state's income tax. He is resigned to waiting, though, possibly until the next general session convenes in January. His plan stalled in the House in the last minutes of the 2006 Legislature.


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