Legislature should act now, tweak later

Gov. Jon Huntsman Jr. has been out this week lobbying Utah's 104 part-time legislators.

He's asking them to support a cobbled-together two-prong approach to "reforming" state income taxes and paying off a soon-to-be $900 million bond to build TRAX extensions and commuter rail in Salt Lake County.

If Huntsman can get a majority vote in the state House and Senate — 38 in the House, 15 in the Senate — our Republican governor's plans will change the face of the state.

The real question is, of course, will this be a change for the better or worse?

Do people want a $70 million personal income tax cut? Yes.

Do citizens want new TRAX lines? Yes.

Do they want commuter rail (a heavy train system) from Brigham City to Nephi? Yes.

But do they also want more spending on public education? Certainly.

Would they even pay more taxes to reduce class size and provide a better education system? Yes to that also.

How do Huntsman and lawmakers balance these desires?

A little over a year ago Huntsman started serious talk about eliminating the sales tax from unprepared food and reforming and cutting the personal income tax.

He got most of what he wanted from the 2006 Legislature — a $160 million tax cut overall, $70 million going to cut the state's sales tax on food by 2 percentage points and $20 million going to targeted business tax cuts.

But on the final night of the general session some House Republicans refused to adopt Huntsman's complicated flat-tax proposal. The $70 million income tax cut was left on the table.

One of the main complaints about Huntsman's flat tax — vigorously overhauled time and again — was that a few Utahns would still be harmed financially in the total switch to the new system.

Capitol Hill brains went to work again in the spring. And out jumped the idea of a "dual track" personal income tax system, one that has no tax losers.

Citizens could stay with the current, slightly progressive system. They would keep all of their current exemptions and deductions, including charitable giving and home mortgage interest. About $40 million of the $70 million cut would be used up spreading the current income tax brackets — so all would see a tax cut in 2006. (All the House and half the Senate face voters in November.)