Getting the flat tax rate down to 5 percent is a goal the governor had said might take several years to accomplish. Huntsman has said a 5 percent flat-tax would encourage economic development by making Utah more competitive with neighboring states.

His proposed taxpayer credit, which would be available to single taxpayers earning no more than $45,000 and married taxpayers making up to $90,000, is intended to help push up to 60 percent of taxpayers into the new flat-tax system. Those who wouldn't pay lower taxes under the new system would still be able to stay in the current income tax system with a top rate of 6.98 percent and take the traditional deductions, like home mortgage interest and charitable contributions.

The governor's effort to encourage more Utahns to give up taking deductions in favor of a flat tax appears to conflict with The Church of Jesus Christ of Latter-day Saints' position on tax policy.

In a statement issued Tuesday, the church said that while the governor's plan was still under review, "on the question of tax deductions for charitable donations, the church continues to believe that the Utah personal income tax system should contain an incentive for charitable giving."

Curtis said House Republicans aren't yet ready to specify where their $300 million tax cut should come, although there is support for reductions both in the personal and corporate income taxes and state sales taxes. If Huntsman and senators agreed, said Curtis, the state could achieve both — give Huntsman's 5 percent flat-rate tax and remove the final 2.25 percentage points of the state's share of the sales tax from unprepared food.

Senators have already said there's no way the food tax will be cut in the 2007 Legislature. Huntsman told the Deseret Morning News' editorial board Tuesday that while he supports removing the rest of the state's share of the food tax, there is no money in his proposed budget to do that.

Even with all that new spending and tax cuts, Huntsman leaves $27.8 million on the table. No doubt legislators will jump at that money, finding ways to fund their own special programs or projects or just give a larger tax cut to Utahns.

Although the state budget would grow significantly if lawmakers adopt his recommended budget, Huntsman said that such growth must be compared to the state's rapid population growth. The number of state employees will actually drop when compared to the number of citizens they are serving, Huntsman said.

But Curtis said: "Many of us just don't think we can sustain such spending — we can't continue building government like this."

While an insider's concern, Huntsman and legislators will likely have to find a way around several "budget caps" that are aimed at curtailing state spending. Huntsman wants to put an extra $20 million into the state's two "Rainy Day" funds — but the funds are already full. And the governor and lawmakers may want to spend more money on targeted transportation projects, which under current law can only grow by $12 million this year.

The Legislature's Executive Appropriation Committee will meet today to adopt a "base budget" for 2007-08 so lawmakers can immediately start their budget process at the first of the annual 45-day general session.

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Contributing: Josh Loftin

E-mail: bbjr@desnews.com