Utah state government is already running a tax surplus of approximately $150 million this fiscal year, with eight months left in tax collecting, the Tax Commission's former chief economist said.

The estimated surplus is a number that tax commissioners — by changing their monthly state revenue reports to delete surplus estimates — have stopped releasing publicly or to state legislators.

At the request of the Deseret Morning News, retired Tax Commission Chief Economist Doug Macdonald, now executive director of Utah Issues, took the commission's last TC23 monthly revenue report and ran those numbers through three economic forecasting models. Macdonald worked for the commission for more than 25 years and made TC23 tax surplus/deficit estimates since the late 1980s.

"I'm confident in saying the state is running a $150 million surplus over budget — and that's just in the first four months" of the fiscal year, Macdonald told the newspaper. "I used my seasonally adjusted and two growth models," averaging the results.

If the state were to run similar tax surpluses for all of fiscal 2006-07, which ends next June 30, legislators and Gov. Jon Huntsman Jr. could be looking at $450 million in one-time monies — a new record for the tax-rich Utah state government.

Except for a fiscal year-end report last July, tax commissioners have refused to give public estimates on how much more money the state is collecting in taxes over the budget adopted by lawmakers, saying they didn't believe such estimates — without Macdonald's work — were reliable.

Tuesday, Tax Commission spokesman Charlie Roberts had no comment on Macdonald's $150 million surplus estimate. "We no longer do estimates on surpluses or deficits," he said.

Macdonald suddenly retired last spring shortly after the end of the 2006 Legislature, where broad-ranging state income tax reforms — including giving a $70 million income tax cut — were debated. The tax cut was given in a later special session.

Macdonald was given a letter from a former tax commissioner saying that he shouldn't give his personal opinions on tax matters to lawmakers or others — and so he left.

Last summer, Macdonald took over the troubled Utah Issues, a citizen action group that advocates for poor and disadvantaged Utahns.

As the past fiscal year came to a close June 30, tax commissioners did include a year-end estimate of tax surpluses in their TC23 report. Ultimately, the commission estimated the state would take in $380 million in excess taxes.

But then the commission didn't issue TC23 reports for the first three months (the first quarter) of fiscal 2007.

Inquiries by the Morning News brought different responses — first that the estimates would be in later reports; then that remaining Tax Commission economists couldn't reproduce Macdonald's work, and so questioned the accuracy of the numbers; then that "several legislators" asked that the surplus estimates not be made public anymore — at least not until the end of the fiscal year.

So, no one would say how much of a tax surplus the state was running.

The TC23 monthly tax surplus estimates have proved political fodder more than once, as public education and other state program advocates argue for more funding because of extra money and legislative conservatives demand tax cuts to curtail state spending.

Two weeks ago, Sen. Curt Bramble, R-Provo, co-chairman of the Legislature's Interim Study Committee on Revenue and Taxation, said that GOP leaders wanted the estimated tax surpluses to be calculated and made public once again.

Tuesday, Bramble, who becomes Senate majority leader in January, said his preference would be that the Tax Commission reproduce the estimates but that some kind of "thorough vetting process" take place before the estimates are made public.

That vetting, he said, could be done by the group of economists and business experts who at least twice a year make formal tax revenue forecasts as part of both Huntsman's and the Legislature's budget-setting process.

"I don't know if the (Tax Commission's) monthly estimates would be better or worse" without Macdonald actually doing the work, said Bramble. "But I believe by vetting those numbers they would be more reliable."

Roberts said since Bramble's comments about wanting to restart commission-made estimates, "we have heard nothing from legislative leadership — so no change there."

"This is very, very pertinent information that everyone should have," said Macdonald, adding that he sees no reason the Tax Commission couldn't still make the surplus estimates if commissioners desired.

Macdonald said deleting estimated tax surpluses from public documents "leaves a big hole in how the state should operate."


E-mail: bbjr@desnews.com