Belts tighten in Utah and U.S.

Gov. Jon Huntsman Jr. announced Wednesday he'll call lawmakers into a special session late next week to plug an estimated $200 million tax shortfall in the current budget year.

Lawmakers said they're ready to roll up their sleeves and make the needed cuts.

"We all understand there's a problem, and we're going to act on that," said House Majority Assistant Whip Brad Dee, R-Washington Terrace. "We're going to address it now. We're not going to wait until after the election."

Huntsman's plan for dealing with the crunch is to require all state agencies — except education — to cut their budgets by 2 percent and to

bond for some transportation and building projects instead of paying cash as called for in the budget that took effect July 1.

"They're moderate cuts across the board in state agencies but holding education harmless," said the governor's spokeswoman, Lisa Roskelley, adding that the governor has no intention of dipping into the Rainy Day fund, which is set aside for emergencies.

Roskelley said the $200 million estimate is "not a concrete number" but should be close to the amount of the shortfall. She said the governor wants to deal with the issue now, rather than wait until the 2009 Legislature begins in January.

Legislative leaders agreed. Sen. Lyle Hillyard, R-Logan, the Senate budget committee chairman, warned that state agencies might be forced to cut twice as much if action is delayed until what would be the third quarter of the budget year.

"Three months in will be a whole lot less painful," said Francine Giani, executive director of the state Department of Commerce. Giani said she had already instituted a hiring and travel freeze.

The governor had advised department heads this summer to curb spending and requested they prepare contingency plans showing how they would reduce their budgets by 1 percent, 3 percent and 5 percent.

While both the House and Senate GOP majority caucuses asked Wednesday for a special session to deal with the situation, they have yet to settle on details. A more firm estimate of the size of the budget shortfall is expected early next week.

"There are a lot of questions we don't have answers for yet," said Senate President John Valentine, R-Orem. He said the need for a special session was first raised Tuesday at a meeting he and House Speaker Greg Curtis, R-Sandy, had with the governor.