Will Huntsman skip tax cut?

As one Capitol Hill wag put it: If Huntsman gets most of his large uninsured health care program — which could well cost a lot of tax dollars — who in their right political mind would vote to cut health insurance for the needy if, or when, state tax revenues turn south in a few years? "And so we'd be faced with a tax increase," he added, just a couple of sessions after the 2008 Legislature gave a considerable tax cut.

Huntsman's new budget will likely top $12 billion, continuing a rise in recent state government spending beyond population and inflation growth.

And there's going to be a lot of money in 2008.

"Not only do we have a lot of one-time money" through tax collection surpluses, says Rep. Greg Hughes, R-Draper, chairman of the House's conservative caucus. "I'm hearing we're going to have a lot of (new) ongoing tax revenue, as well."

The state's two "rainy day" surplus accounts have both topped out — by law no more money can go into the $300 million funds. An October revenue update (a new update will come with Huntsman's Monday budget release) estimated tax surpluses in the current budget year upward of $400 million.

Yes, the state has multibillion-dollar transportation needs, including rebuilding and expanding I-15 in Utah County and I-80 from State Street to Parley's Canyon in Salt Lake County. And it's true that lawmakers and Huntsman have been pouring hundreds of millions of dollars in sales tax and other general revenues into roads for several years.

But state highways have always been built and rebuilt with multiyear bonds, with gasoline tax revenues playing a big part of the funding. It has been the idea that future generations will drive on those roads, and so should help pay for them; that motorists use the roads, and so should pay for a large part of them through the gas tax.

Paying cash for roads with today's general revenue tax surpluses goes against both of those long-held policies.

The state is seeing a crush of new public school students, and veteran schoolteachers retiring — a double whammy on the education front.

But the state has faced rapid school enrollments before, some lawmakers say. And along with many of the new kids will come parents earning ever-increasing wages and making new purchases — both taxable.

"We have to keep state spending under control," warns Hughes, who, along with his conservative caucus, yearly attempts to slow the growth in state programs.

While Utah government had to actually cut many state programs in the early 2000s — when tax collections fell $700 million short over several years — state revenues rebounded with a vengeance. Including only state — not federal — dollars, state spending went up by nearly a third over the past two budget years — even while $310 million in tax cuts were adopted.