Utah bill proposes $250M tax relief

The first major tax-cutting bill of the 2007 Legislature was formally introduced Wednesday — a measure that would give more than $250 million in income tax relief and remove the remaining share of the state's much-disliked food tax.

"This is what we (conservative members of the House) want," said sponsor Rep. John Dougall, R-Highland, chairman of the House Revenue and Tax Committee. "Will we get all of it? Probably not. But this is a starting point" in negotiating with Senate Republicans.

Dougall added, "I feel I have the support of our (House GOP) caucus." But House GOP leaders have already said they may not get a large personal income tax cut this year and may have to compromise with a property tax reduction.

Dougall's bill is costly and broad-reaching. And if it were adopted as written, it would be a major step forward in tax reform, as defined by various individuals and committees over the last few years.

Senate President John Valentine, R-Orem, questioned how far the bill will go. "I think it may be one member talking at this point," he said, noting House leadership has not mentioned the bill in discussions with their Senate counterparts.

"I would be surprised to see the House caucus support that size of public education tax cut," Valentine said, predicting the actual cost of Dougall's tax cut would be much higher than $250 million. "They've got some fuzzy math to deal with if they're going to set out all those goals."

However, the House GOP caucus has already voted for a $300 million tax cut this year — while members have not backed an exact plan for those cuts yet.

Even if the bill does advance as written, Valentine said it won't pass the Senate. GOP senators made it clear last year they have no interest in removing any more of the sales tax off food.

Gov. Jon Huntsman Jr.'s spokesman Mike Mower said that there are "concepts in (HB123) that we can support. However, there is still a good deal of time in the session to work out numbers, details and specifics. Income tax reduction continues to be our top priority. And as the governor said Tuesday night in his State of the State address, we support a unified sales tax rate."

HB123 would:

• Reduce the current multideduction/exemption state income tax's top rate from 6.98 percent to 6.9 percent.

• Reduce the new flat-rate income tax from 5.35 percent to 4.9 percent.