Higher education by next year could be completely paid for by income tax revenues — it has been a general fund/school fund hybrid — the report says. If income tax revenues keep growing, legislators could boost money for schools, cut taxes or put more money away in the schools' Rainy Day Fund.

Both Bigelow and Burningham say they want more money for schools next year. While early projections show revenue surpluses, Bigelow says the state may want to see how things shake out before talking spending or tax cuts.

"One thing I will say is, I personally am going to take a cautious approach to tax cuts and to funding because there's this mortgage (industry) cloud on the horizon, and no one knows what the impact of that will be over the next year or two," Bigelow said.

The State Board of Education's finance committee is expected to discuss initiatives to boost school funding, including impact fees on new homes in fast-growing school districts and reducing or eliminating tax credits and deductions.

"When is it going to be enough ... I can't answer that question," Burningham said of education spending. "The needs of education are tremendous, and quality of education is so important for our kids and we need to do what we can to improve that."

The report is online at www.utahfoundation.org.

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E-mail: jtcook@desnews.com