"There is a lot of interest among a number of us to make any tax hikes revenue neutral," said Hughes. "We wouldn't act in the special session" on tax cuts greater than the already-agreed-upon $70 million, he said, because legislators won't know until November's ballot if citizens will approve any sales tax increases.

"But in the (2007) general session we should act" to give new tax cuts, Hughes explained.

Two years ago Hughes passed a bill that redefined the state's spending limitation law. Under that new formula, legislators will only be able to open the current year's budget and spend an additional $12 million in general state programs. And now with a $380 million tax surplus, Hughes and other conservatives worry some lawmakers will try to somehow bypass the spending limitation law so state programs can spend even more cash.

Tuesday, Huntsman told the Deseret Morning News that he hopes a growing Utah economy will allow further tax cuts. If enough new tax revenue is projected to come in 2007-08 (that budget being adopted in the 2007 Legislature), then another round of tax cuts may come then, the governor said.

Speaking about the record-high tax surplus announced Wednesday, Huntsman said: "Utah's economy is hot, and we are all benefiting."

While new state tax revenue estimates will come in December with Huntsman's recommended fiscal year 2008 budget, and will be updated in February when lawmakers set the 2008 spending plan, Hughes and others believe the state will take in another hunk of new tax revenue.

And the new $380 million tax surplus for last year shows state budgeters have been cautious in estimating future revenue growth. Between previous tax surpluses and new revenue growth, legislators in the 2006 Legislature in February had an extra $1 billion to spend.

Legislators decided then to give an overall $160 million tax cut; $70 million comes Jan. 1 when 2 percentage points of the state sales tax on food is reduced; $20 million goes to targeted business tax cuts; and $70 million was allocated for an income tax cut, which is likely to pass next week.

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E-mail: bbjr@desnews.com