Utah Legislature: Senators OK a cigarette tax increase

SALT LAKE CITY — State senators approved a cigarette tax increase late Thursday, setting up a budget showdown with GOP Gov. Gary Herbert if he refuses to go along with a tax hike that polls show is favored by 80 percent of Utahns.

A basic budget agreement between legislative leaders and Herbert stumbled earlier Thursday, but in the Executive Appropriations Committee, House and Senate leaders from both political parties still backed a spending plan that includes the $1 per-pack tobacco tax increase.

However, the committee, which met into the evening, did leave out a proposed $21 million cut to public education for next budget year, which starts July 1. The governor has made it clear he does not want to reduce spending for schools.

"He's waiting to watch what we come up with," said Senate Majority Leader Scott Jenkins, R-Plain City. "We're close but we're both a little stubborn at this point. It's like one is waiting for the other one to flinch. We'll see."

The governor's spokeswoman, Angie Welling, said earlier Thursday that Herbert remains committed to protecting public and higher education from additional cuts. "His hope is that lawmakers will do the right thing (for the) No. 1 priority in this state, which is education."

After the Senate passed the cigarette tax, Welling said the governor "has been opposed to any tax increases, including the tobacco tax, this session. With the passage of an increase by both the House and Senate, it obviously remains part of the overall budget conversation."

GOP Senate and House members like the idea of public education taking a bit of a reduction, even though it is much less than other state agencies are taking in an effort to close a $700 million budget gap.

Herbert's budget director, John Nixon, said he is pleased with the budget process "so far."

"It's been very cooperative up to this point and I anticipate that will continue," he said after Thursday's committee meeting. Without elaborating, he added that "adjustments will certainly have to be made."

A final decision on public education funding may well wait until next Thursday, the last day of the 2010 Legislature.

Senators approved the cigarette tax 20-9 at the end of the Thursday floor time after Republicans held two closed-door caucuses. Both the GOP and the Democrats were split over the issue.

"I think it was tough for some of them," said Senate President Michael Waddoups, R-Taylorsville. Only 14 Republicans voted for the increase, one vote shy of the majority needed to pass a bill.