Huntsman said that the big boost for education was "a signal of hope and of commitment" showing the state cares about teachers — a sentiment echoed by executives of the Utah Education Association, the state's largest teachers union.

"He really stepped up to the plate," said Kim Campbell, president of the UEA. "Overall we are really encouraged. It is exciting that (Huntsman) focused on what we value — smaller class size, quality teaching."

The Weighted Pupil Unit — the state's basic per-student budget number for K-12 — goes up by 7 percent, and Huntsman's budget provides money for class-size reduction to an average of 20 children for K-3rd grade and full-time kindergarten for those who want it.

Curtis said his caucus also wants to give an additional $300 million to public education next year. "We match our tax cut to more spending on schools — dollar for dollar." Huntsman would get about the same amount in additional education funding, but the Legislature may not spend the money in the same individual programs or pay raises, said Curtis.

Overall, Huntsman's $10.7 billion spending plan for fiscal 2007-2008 takes care of most state needs with some money left over, the governor said.

Huntsman's economists estimate that the state has a record-setting $498.2 million for the year that ends June 30.

Combine that with estimated revenue growth of $308.4 million for the last fiscal year, and together legislators will have a mind-bending $800 million in new cash to allocate when they come into session Jan. 15.

Add in natural tax revenue growth estimates for next year, and the state will have $1.6 billion in additional revenue.

"The economy is growing, job growth is exceedingly high, and we have a large budget surplus," Huntsman said.

With those record levels of tax collections, Huntsman said he wants to continue with tax reform. That takes away some cash that otherwise would have grown state government more than some conservative legislators wish. Overall, the 2007-08 budget will grow by 6.7 percent, if Huntsman's recommendations in all areas are adopted.

If only state funds are counted, however, the new budget represents a hefty 15 percent increase. That's less than the 17 percent increase that lawmakers adopted in the current year's budget. But at 15 percent, that means state spending on local tax dollars will have gone up nearly a third in two years — a level that some GOP lawmakers may balk at.

Huntsman wants to lower the current 5.35 percent level of the new flat-rate income tax created by the 2006 Legislature to 5 percent and also create a taxpayer credit for Utahns who choose to switch to the new flat-rate system.