Deal gives whopping tax break

Clark and Curtis said that $20 million would reduce the House's $105 million tax cut to $85 million. But political differences immediately popped up, as several House Republicans said state taxes wouldn't be cut in that $20 million reduction — each individual boutique taxing entity would pay it — so, they asked, why should the House's half be reduced by that amount?

Huntsman spokesman Mike Mower said the governor is glad to continue negotiating over tax cuts and tax reform. The $210 million compromise "moves us much closer to a good decision" in tax cuts, although Mower stopped short of endorsing the tax-cut package.

"This (compromise) does establish a framework for meaningful tax reform," Mower said.

Clark said that last year's $180 million tax cut, coming through a new flat-rate income tax and reducing the state's sales tax on food, is about the same percent of last year's tax surplus as the $210 million is to this year's tax surplus.

But some conservative House members still believe that Utahns should get more than a $300 million tax cut — the original position of the House GOP caucus. And without taking that much or more money out of state government revenues, state government will grow by more than 10 percent this year — a growth rate that can't be sustained over time, conservatives have said.

Valentine and Clark both said the Senate is concerned that the $210 million number is too high. Valentine said such a cut may not leave enough money for transportation needs, adequately funding Utah's colleges and universities and some "critical" health and human service programs.

But next week, both the legislative and executive branch's budget experts will issue updated tax revenue estimates for 2007-08.

Clark, a banker, said he personally believes the estimates will be higher than the December numbers used in Huntsman's budget recommendations.

"If they are more, that would help us a lot in squeezing the budget and tax cuts together," said Valentine.

---

E-mail: bbjr@desnews.com