From Deseret News archives:

Tax cut still on Demo agenda

Published: Wednesday, Sept. 13, 2006 8:20 p.m. MDT
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While acknowledging that the fate of a proposed income-tax cut does not hinge on their support, legislative Democrats are confident they can still play a significant role in next week's special session.

That could prove particularly true on a still-developing funding plan for transportation, which the Democrats generally support because it will expand public transportation options such as light and commuter rail along the Wasatch Front. With Republicans not as united on one particular plan, House Minority Leader Ralph Becker, D-Salt Lake, said that Democrats may be able to exercise some influence that they lack on the tax cut.

As proposed, the tax cut would spread brackets under the current system for this year, amounting to $40 million in cuts, and create an optional, flat-tax rate of 5.35 percent starting next year that would total another $30 million. For the average family, it would amount to a $48 tax cut this year. Meanwhile, the flat-tax rate would probably only be utilized by about 5 percent of taxpayers — primarily those who are wealthy — and could amount to hundreds, or even thousands, in tax-cut dollars.

"The Republicans have the votes to pass the income-tax changes," including some Democrats, Becker said. "But we will still have the chance to express our voices."

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During a news conference Wednesday at the Capitol, Democrats joined with education advocates to voice concerns about the tax-cut plan, which will amount to $70 million this fiscal year. They also questioned the timing for the special session, which is only weeks before elections. And the Democrats criticized plans to discuss issues that are better suited for a general session, "when all of the mechanisms of the budget are in play," said Sen. Scott McCoy, D-Salt Lake.

The $70 million was earmarked during the 2006 general session as part of a deal that also included $70 million for a 2 percent reduction in the sales tax on food and $20 million for business tax cuts. Until this plan, however, no proposal for an income-tax reduction could gain enough traction to be approved by the Legislature.

McCoy said that even though the $70 million was approved, legislators have had little time to delve into this plan. Because of that, he said, it should not be handled during an all-too-brief special session.

"Just because the Republican majority decided amongst themselves to set aside $70 million doesn't mean that there's been comprehensive debate about how to use that $70 million," he said.

Instead, Democrats suggested that the money would be better used for human services, transportation, and especially education funding. Ideally, that would include targeted programs to reduce class sizes or increase teacher pay.

"The money needs to end up in our classrooms," House Assistant Minority Whip Pat Jones, D-Salt Lake, said. "Whether it's computers, books, increased teacher pay, or class-size reduction, that is what the people of this state want."


E-mail: jloftin@desnews.com

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