Deal gives whopping tax break

Utahns should prepare for at least a $210 million tax cut this year — one of the largest ever given by the state.

Over the past several days, Gov. Jon Huntsman Jr. and House and Senate GOP leaders reached a soft compromise — outlined Thursday in an open House Republican caucus.

Sources within the executive branch of government said that the governor has agreed to increase his original $100 million tax cut to the $210 million level.

If their GOP members agree, House Majority Leader Dave Clark, R-Santa Clara, said the tax cut "will be cut down the middle" — each body getting to decide what method by which $105 million in cuts will come. "It is a novel idea," he told a partly skeptical room full of GOP representatives.

For the Senate, that decision may already be in the form of SB223, a flat-rate income tax bill supported by Huntsman and awaiting debate on the Senate floor.

SB223 by Sen. Wayne Niederhauser, R-Sandy, as outlined in a story in Thursday's Deseret Morning News, would trim $102 million in personal income tax and just about spend the Senate's $105 million allotment.

SB223 "would be our highest priority, we want to put it toward income tax reform," said Senate President John Valentine, R-Orem.

But a number of House Republicans don't like SB223. They say the bill doesn't give the same tax breaks to upper middle-income Utah families as it does to low-income taxpayers, and that such a move may shrink the more affluent group that now pays most of the state income taxes.

To reach some political settlement with the Senate, "will we have to hold our nose and vote for something that we basically disagree with?" asked Rep. Jim Dunnigan, R-Taylorsville.

Earlier, Dunnigan said those upper income Utahns "were taking it in the shorts" over the Huntsman-suggested flat-rate income system.

Agreeing to accept the Senate's $105 million tax cut, Dunnigan said, "is like we are both building one house, and we (in the House) don't know what the other side of the house will look like — but we will still have to live in it. And I imagine the Senate has the same concerns. But how do we know" it will work?

House Speaker Greg Curtis, R-Sandy, noted that the House has already passed a bill that would remove the food sales tax from the various "boutique" sales taxes, like the zoo, arts and parks tax and transit tax. That would cost those taxing districts around $20 million.