Will Huntsman skip tax cut?

Gov. Jon Huntsman Jr. will release his recommended 2008-09 state budget next week, and Capitol Hill sources say it will lack something that Huntsman has pushed each year since he took office in 2005 — a general state tax cut.

Huntsman, a Republican, and the GOP super-majorities in the state House and Senate have given significant tax cuts over the past two years — and some "targeted," smaller tax cuts in 2005, Huntsman's first year in office.

Huntsman and lawmakers have "reformed" the state's personal income taxes — giving a tax cut to nearly all Utahns. They have cut the state portion of the sales tax on food by more than half. They've also cut smaller taxes or given specific tax breaks.

Some of those multimillion-dollar general tax cuts won't really be felt by Utahns until this spring, when they pay their 2007 income taxes. On Jan. 1, most Utahns go from an income tax rate of around 7 percent to 5 percent.

With Huntsman seeking re-election in 2008 (he already says he won't seek a third term as governor), and with all 75 House members and half of the 29-member Senate also up for re-election, one could think that Huntsman, much-beloved by citizens as public opinion polls show, might want to suggest another round of tax cuts.

But several legislators are guessing just the opposite, believing that Huntsman will want to spend what new tax revenues there are on his already-announced main goals for 2008 — higher teacher pay, health insurance for the uninsured and improved air quality.

"When I heard of his priorities for next year," said House Minority Leader Brad King, D-Price, an 11-year legislative veteran, "it looked like there wasn't room for a big tax cut."

"That's probably accurate," said House Speaker Greg Curtis, R-Sandy, who has not yet been privately briefed on Huntsman's budget. "We don't want to mess with the (personal) income tax; that reform takes effect Jan. 1. All property tax goes to education" — budgets that are being built up by lawmakers. "And I don't see the Senate cutting any more of the sales tax on food — so there's really nowhere to go" for tax cuts.

While Utah's economy is still booming — even the housing market here has not turned as quickly as in many other states — legislative conservatives worry that if the state spends as much as it will raise next fiscal year, it may have to cut state programs within a year or two or raise taxes if Utah's economy eventually weakens.